Feedstock competition may drive Japan's chemical industry to niche products

By Gurdip Singh
Correspondent

Published: September 13, 2013 5:07 pm ET
Updated: September 13, 2013 5:26 pm ET

Related to this story

Topics Materials Suppliers, Asia

SINGAPORE — Japan's chemical industry faces a tough feedstock competition and will have to intensify its focus on specialty and niche products, both for the domestic and export markets, say industry official at an industry conference in Singapore.

U.S. shale gas and oil, an eventual feedstock source for American petrochemicals, are a major threat to the Japanese chemicals industry, said Yasushi Nawa, managing director and CEO at Mitsui Chemicals Asia Pacific Ltd. in Singapore.

Methane hydrates — solid methane-rich compounds found under sediment in the deep ocean floor, are a "feedstock substitute hope" for the globally-challenged Japanese chemical industries. But experts say methane hydrate feedstocks may take decades to develop, and the eventual cost is still unpredictable.

Industry observers commended the premium quality of Japanese specialty chemical products, saying these were well respected in the developed Western markets. But there was a legitimate fear of being challenged by similar products produced by the revived American petrochemicals sector and the emergence of ambitious Chinese producers backed by Western technology.

The U.S. shale oil and gas resources are good for another 100 years of supplies. Their development has initiated the rebirth of the U.S. petrochemicals sector, said Balaji Singh, president of Houston-based CMR Inc. and organizer of the Singapore conference, "Global Polyolefins in Transition," held Sept. 11-13.

The Japanese know that the Chinese have much more shale gas and oil resources that the United States, and the Chinese's renowned ambition of mass production, using cheap resources, would re-write all market economics for specialty chemicals.

But Mitsui's Nawa still felt the Japanese were confident of working their way out through niche-product diversifications and research and development on new products. He added that opportunities still exist in the health care, sanitary care and food safety care segments.

He highlighted Mitsui's US$2 billion investments in semi-finished and finished product plants in Southeast Asia and China since 2000. Nawa said Mitsui is set to commercialize its latest investment of US$200 million in Singapore, including a 772 million-pounds-per-year polyethylene plant at Singapore's petrochemical hub on Jurong island, which will start production in January 2015.

Also, Mitsui is a 20 percent partner in a 661million-pound-per-year metallocene polymer plant on Jurong island. The plant, in partnership with Japan's Prime Polymer Co. Ltd., is scheduled to start production in the second quarter of 2015.

Mitsui, he said, was not taking any high-risk of investing in upstream facilities, such as naphtha plant. The company is comfortable to be aligned with third-party sourcing for feedstocks.


Comments

Feedstock competition may drive Japan's chemical industry to niche products

By Gurdip Singh
Correspondent

Published: September 13, 2013 5:07 pm ET
Updated: September 13, 2013 5:26 pm ET

Post Your Comments


Back to story


More stories

Image

DuPont resins help take Nike golf balls 'Fore!'ward

July 25, 2014 1:07 pm ET

It may be difficult to imagine just how much science, not to mention rubber and plastic components, go into a golf ball. But global giant DuPont Co....    More

Image

Bioplastics maker wins government funding

July 25, 2014 12:13 pm ET

Canadian bioplastics maker Solegear Bioplastics Inc. has won $1.6 million in funding from the government-sponsored Western Innovation Initiative...    More

Meredian merging with Danimer Scientific

July 24, 2014 1:59 pm ET

Bioplastics maker Meredian Inc. is merging with its sister firm, Danimer Scientific LLC.    More

Image

US Bioplastics receives funding to bring Gatoresin to the market

July 24, 2014 1:44 pm ET

Materials maker U.S. Bioplastics is hoping its Gatoresin product will take a bite out of the bioplastics market, thanks to funding from a state...    More

Image

BASF posts growth in second quarter

July 24, 2014 11:08 am ET

German chemical giant, BASF SE, has announced a 1 percent growth in sales for the second quarter of 2014 compared to the same period in 20...    More

Market Reports

Plastics Recyclers Data Report & Directory

This exclusive MS Excel database contains all the companies from Plastics News' ranking of top North American Recyclers and Brokers by reprocessed volume and also includes a directory with materials processes, services offered and company contact information. Data is based on primary research by PN editorial staff.

Learn more

2014 Injection Molding Industry Report

GROWTH, OPPORTUNITY IN SIGHT FOR INJECTION MOLDERS IN 2014

In the wake of the economic turbulence earlier in this decade, molders today find themselves in much better shape. Molders are gaining a competitive advantage by investing in people, equipment and seeking inroads into new markets on a global scale.

Growth in the injection molding industry is going to be driven by low financing costs and a continued move to reshore some business.

Learn more

Shale Gas Market - Analysis of North American Region

This report highlights the impact of shale-based natural gas on the North American plastics market and features an in-depth analysis of production trends in the United States during 2013 and a forecast for 2014 and beyond.

Learn more

Upcoming Plastics News Events

September 10, 2014 - September 12, 2014Plastics Caps & Closures 2014

January 14, 2015 - January 14, 2015Plastics in Automotive

February 4, 2015 - February 6, 2015Plastics News Executive Forum 2015

More Events