Japan can maintain supply of its petroleum products, including naphtha-derived chemical products, beyond the current fiscal year that ends in March 2027, prime minister Sanae Takaichi said on 2 June.
Takaichi had already declared that Japan can secure stable oil supply beyond March 2027, but supply of naphtha-derived products had previously been secured only through to the end of this year. Her latest statement extends that outlook.
The outlook reflects the ongoing recovery in Japan's naphtha procurement, which has currently risen to around 85pc of normal levels, supported by both domestic refining and alternative imports from regions outside the Middle East. Japan has also boosted imports of intermediates, which has helped limit drawdowns of intermediate stocks in April, Takaichi said.
Manufacturers of midstream products such as polyethylene, as well as downstream products — including paints and thinners, polyvinyl chloride (PVC) pipes and insulation materials — have reported that their supply performance up until April has been at the same level as or higher than in the previous year, Takaichi said, adding that they also expect to continue supply going forward.
But inventories in the supply chain for paints and thinners remain relatively low. In response, in addition to petrochemical firms' supply and trading firms' imports, refiners will directly supply feedstocks such as toluene and xylene to paint and thinner manufacturers, enabling supply of up to 1.8 times the usual level of demand, according to the government. This arrangement follows domestic distribution bottlenecks for paints and thinners.
Because of disruptions to shipments from the Middle East stemming from the US-Iran war, Japan's naphtha imports fell to 710,000t in April, down by 46pc from a year earlier, based on preliminary finance ministry data. Imports in May and June are expected to exceed the April level, supported by efforts to increase alternative imports from the US and other regions outside the Middle East.
