Japan's monthly ethylene utilization rate hits 11-year low

In March this year, the utilization rate of Japan's ethylene production equipment was 79.6%, far below the target value of 90%, which is a measure of prosperity. It is also the first time in 11 years that the ratio has dropped below 80%.

According to the analysis, the low equipment profit margin is mainly affected by the decline in domestic consumption due to high prices. In addition, the demand for resin in the Chinese market is sluggish, and the export of Japanese products is affected.

Ethylene is a synthetic resin raw material widely used in automobiles, home appliances and daily necessities. This is the first time that the utilization rate of 12 sets of ethylene production equipment in Japan has dropped below 80% since June 2012, when the demand in China's manufacturing market declined. The utilization rate of ethylene equipment in that year was 79.4%. The 90% utilization rate of ethylene equipment is regarded as an important indicator for measuring the prosperity of the Japanese industry. In March, the data was lower than this indicator for eight consecutive months. According to the analysis, if the utilization rate of ethylene equipment continues to decline, it will become a major factor in depressing the performance of Japanese chemical companies.

At present, the operation of Japan's ethylene production equipment has exceeded domestic demand, and whether the products produced by excess capacity can be digested by export is a major issue. According to industry insiders, large petrochemical companies in China and other economies are promoting investment in ethylene production-related facilities and are expected to make progress in deplasticization in the future.