Petrochemicals industry in Japan staggers under earthquake and tsunami

15-Jun-11

Japan's petrochemicals industry suffered a severe blow when the country was hit by an earthquake and tsunami on March 11 2011, as per Research and Markets. Many petrochemicals complexes were immediately shut down, along with severely damaged nuclear plants and oil refineries in northeastern Japan. Nuclear emergency was declared in Japan after the explosion in the Fukushima nuclear power plant. Two months after the tsunami, the country's petrochemicals industry is still recuperating from the damage caused by the disaster. Though the petrochemical complexes in southern Japan were undamaged and could potentially operate at normal rates they were indirectly affected because of feedstock shortages caused by the closure of crude oil refineries and naphtha crackers in the tsunami hit area. As petrochemicals production in Japan has decreased in the past two months, its exports will decrease significantly. This provides an opportunity for other Asian producers such as Korea, to increase their market. Petrochemicals production is expected to remain low for at least one year because of inadequate power generation caused partly by the closure of all nuclear power plants on Japan's Pacific coast. Crude oil refineries are also struggling to meet the increased demand in the reconstruction period. This will further aggravate the supply of the naphtha feedstock, crucial to petrochemicals production, which is already priced very high on the international market because of Middle East turmoil. The disaster has forced Japan to shift from nuclear power to other sources to supplement its energy requirement.