Domestic production facilities for ethylene, a basic raw material for various chemical products such as plastics, will be shut down for the first time in about 10 years. Domestic manufacturers are being forced to rationalize due to increased production in China.
Mitsui Chemicals and Idemitsu Kosan have begun considering shutting down one of the two ethylene production facilities they jointly operate at a complex in Chiba Prefecture, with the aim of shutting down the plant by fiscal 2027.
The plan is to reduce production capacity by approximately 40%, and this will be the first time in approximately 10 years that a domestic manufacturer has suspended equipment.
Ethylene is a basic raw material for a variety of chemical products such as plastics, and is used as an indicator of market conditions for petrochemical products.
According to the Japan Petrochemical Industry Association, domestic production last year was at its lowest level in about 30 years, and the operating rate of domestic facilities had been sluggish for more than a year and a half due to factors such as China's production expansion.
Among domestic manufacturers, Resonac Holdings has announced plans to spin off its business at a complex in Oita City, where it has ethylene production facilities, into an independent company in two to three years and focus on semiconductor-related businesses. .
In addition, the Mitsubishi Chemical Group is also considering separating its petrochemical business and reorganizing it with another company, and it is expected that further moves to rationalize production and business will proceed.