APIC ’25: Japan petrochemical industry extends slump in 2024

BANGKOK (ICIS)–Sluggish domestic demand weighed on Japan’s petrochemical industry, resulting in reduced production volumes in 2024 compared with previous years, according to the Japan Petrochemical Industry Association (JPCA).

• 2024 ethylene output falls 6.3%
• Production of five major plastics shrink by 5%
• Japan economy forecast to grow by 1.2% in 2025

“Although some crackers in Southeast Asia and East Asia are reducing production, there are plans for capacity increases in crackers that significantly exceed demand in China,” JPCA said in a report prepared for the Asia Petrochemical Industry Conference (APIC) 2025.

The conference is being held in Bangkok, Thailand from 15-16 May.

Operating rates of crackers in Japan are expected to remain lowered, as with previous years, JPCA said.

Japan’s ethylene production in 2024 fell 6.3% year on year to 4.99 million tonnes, as domestic crackers have operated at below 90% of capacity since August 2022, with the monthly average run rate falling below 80% five times in 2024.

Japan’s real GDP growth rate in 2024 was 0.1% amid weak exports, neutral growth in private consumption, and a slight increase in government consumption.

For the whole of 2024, the country’s total production of five major plastics – namely, linear density polyethylene (PE), high density PE (HDPE), polypropylene (PP), polystyrene (PS) and polyvinyl chloride (PVC) – declined to 5.7 million tonnes, lower by 5.2% from 2023.

Production (in thousand tonnes)

Product	2024	2023	% change
Ethylene	4,989	5,324	-6.3
LDPE	1,160	1,219	-4.8
HDPE	656	665	-1.4
PP	1,935	2,075	-6.8
PS	549	564	-2.7
PVC	1,406	1,496	-6.0
Styrene monomer (SM)	1,297	1,428	-9.2
Ethylene glycol (EG)	276	264	4.6
Acrylonitrile (ACN)	303	341	-11.2

Sources: METI, Japan Styrene Industry Association (PS, SM) and Vinyl Environmental Council (PVC)

Domestic demand as ethylene equivalent in 2024  inched up by 1.4% to 3.92 million tonnes, according to JPCA data.

While the global economy is expected to grow steadily in 2025, there is a risk of deterioration in the global economy and a corresponding decline in demand due to geopolitical issues, JPCA said, citing Russia’s invasion of Ukraine, the Israel-Hamas war, as well as the tariff policy of the US Trump administration.

The latter has caused costs of raw material prices to soar, JPCA said.

Meanwhile, Japan’s real GDP growth rate for 2025 is projected to accelerate to 1.2%, supported by increased exports, sustained growth in personal consumption, and increases in capital investment, said JPCA.

Higher wage hikes in 2025 should help boost domestic consumption, it said.

In the report, JPCA called on the petrochemical industry to adopt new roles and responsibilities in achieving carbon neutrality and advancing a recycling-oriented society.

The report outlined a two-stage timeline: first, to reduce greenhouse gas emissions from existing facilities by immediately deploying currently available technologies; and second, to establish sustainable development goals by gradually introducing new technologies into society.

“Not only corporate efforts but … collaboration and system design throughout the supply chain are required,” JPCA said.

Focus article by Jonathan Yee