On April 23, the Japan Petrochemical Industry Association (JPCA) reported that affected by limited raw material procurement and scheduled plant maintenance, the operating rate of Japan’s ethylene plants fell to 68.6% in March, hitting the lowest level since statistics began in January 1996.

Japan has 12 naphtha cracking plants, which take naphtha as raw material to crack and produce basic chemical products such as ethylene and propylene. Around 40% of its naphtha and 95% of crude oil for oil refining rely on imports from the Middle East. Domestic refining capacity can only meet 40% of naphtha demand, and shipping disruptions in the Strait of Hormuz have further exacerbated raw material procurement difficulties.

JPCA officials stated that due to the uncertain outlook for naphtha supply and high costs of plant shutdown and restart, enterprises maintain low-load operation to stabilize the industrial chain. It is reported that the industry’s critical operating rate is generally around 70%. Four ethylene plants underwent scheduled maintenance in March, compared with no maintenance in the same period last year, dragging total ethylene output down to 272,600 tons, a sharp year-on-year drop of 38.8%.