A week after the massive earthquake and tsunami caused widespread devastation in Japan, Asian petrochemicals are feeling the effects of Japanese production losses, as per ICIS.
Regional supply of paraxylene (PX) was notably tighter, with three Japanese facilities owned by JX Nippon Oil & Energy shut since 11 March. Spot PX prices pulled back slightly on Friday, following sharp gains through the middle of the week, as JX Nippon Oil declared a force majeure on supply. Japan, a major PX exporter in the region, supplied China with 1 mln tons in 2010. The main downstream market for Asian PX - purified terephthalic acid (PTA), has started to suffer from tighter PX supply, with some Chinese producers bringing forward planned turnarounds at plants.
A few shut-down plants are slowly coming back on stream in the northeast of Japan, including two of the six shut refineries: a 175,000 bpd refinery in Chiba owned by Kyokuto Petroleum Industries - a joint venture between US major ExxonMobil and Japan's Mitsui Oil - and TonenGeneral Sekiyu's 335,000 bpd unit in Kawasaki. A major impact on longer-term supply is unlikely, given the slow pace of demand growth in Japan and spare capacity in the industry.
The prospects remain bleak for an imminent restart of other derivative facilities where the four shut-down naphtha crackers are located. Meanwhile, petrochemical plants still on stream are unlikely to run at maximum capacity because of fuel and power shortages, as well as problems obtaining feedstocks due to port closures near the epicentre of the earthquake.