Japanese petrochemical firm Asahi Kasei expects demand for petrochemical products, including acrylonitrile (AN) and functional polymers for automobiles, to recover in the second half of the April 2020-March 2021 fiscal year.
The company thinks demand for petrochemical products hit a bottom in April-June, although a second wave of Covid-19 infections has created further uncertainty in the market.
It forecasts that the use of polymers for automobiles will start to pick up in July-September following a rebound in Japan's domestic car production.
The company's AN sales declined in April-June compared with the same period a year earlier. Polymer shipments to the automotive sector dropped over the same period, as vehicle output fell on limited economic activity caused by Covid-19 disruptions.
Asahi Kasei expects operating income from its petrochemical material segment to fall on the year in the latter part of 2020-21 but rise from the first half of 2020-21. Asahi Kasei has also forecast a 50pc year-on-year fall in its operating income from the segment for the whole of 2020-21.
Asahi Kasei has a total production capacity of 960,000 t/yr for AN in Japan, South Korea and Thailand. It also has domestic capacity of 390,000 t/yr for styrene monomer and produces polymers such as polyethylene, polypropylene compounds, polystyrene and styrene acrylonitrile co-polymer, as well as synthetic rubbers. It additionally operates a 567,000 t/yr naphtha cracker in Mizushima, Okayama prefecture, in a joint venture with petrochemical producer Mitsubishi Chemical.
Japan's major petrochemical firms have been hit by weakening demand, especially from the global automotive sector, because of the Covid-19 pandemic.
Mitsubishi Chemical and petrochemical producer Ube Industries sold less engineering plastics and synthetic rubbers, respectively, in April-June compared with the year-earlier period. Chemical producer JSR's sales of plastics, including functional acrylonitrile-butadiene-styrene resins and synthetic rubbers, also fell in April-June from a year earlier. But JSR expects demand for its plastics and rubbers from carmakers and tyre producers to start to recover from July-September.
