Mitsui Chemicals is studying the use of ethanol as a feedstock in its naphtha crackers to boost competitiveness in response to an oversupply in the global petrochemical market, the company’s CEO said on Friday.
“It’s difficult to completely overhaul our conventional crackers, so we are studying to modify them to use ethanol,” said Hashimoto Osamu, President and CEO of Mitsui Chemicals, speaking to Reuters on the sidelines of the Asia Petrochemical Industry Conference.
The Japanese firm joins other producers in the region who are exploring alternatives to traditional naphtha, including ethane, in response to mounting pressure on profit margins. A significant increase in petrochemical capacity, particularly from China, has weighed heavily on the sector.
Osamu predicted that Japan’s petrochemical industry may undergo further consolidation by 2030, driven by ongoing market challenges.
He noted that a recovery in petrochemical margins could take three to four years, depending on the pace at which new Chinese production slows.
Trade dynamics also remain a concern for the company, especially the risk posed by tariffs on Japanese exports, which could impact demand for petrochemical products.
“The situation is volatile, so we’re closely monitoring developments. So far, our automotive customers haven’t been affected, but if that changes, our exports to the U.S. could face setbacks,” Osamu said.
