Petroleum derivatives shortage hits Japan's automotive industry
As reported by Japanese media outlet Yomiuri Shimbun on May 8: The impact of the blockade of the Strait of Hormuz is spreading to Japan's automotive manufacturing and repair sectors.
With the halt in naphtha imports, manufacturers and the paint and bodywork industries are beginning to face shortages of thinners. If this unstable supply situation continues, it will severely affect the entire industry.
According to Ikenai Repair (Tokyo), which operates 31 body and paint shops across Japan, around mid-March one supplier contacted them saying, "The supply of thinners may become unstable." Supply dropped by about 80%, and purchase prices rose by 4–5%. Originally planned to open three new stores in April, the expansion was postponed due to inability to procure thinners and paint. Thinners are crucial for cleaning parts and diluting paint. Technical Department General Manager Sho-go Hishigi complained: "If this situation persists, we might not be able to continue operations."
Signs of declining production due to thinner shortages have begun to emerge. On April 20, "Japan Full Half," a manufacturer and distributor of truck and other commercial vehicle parts, announced that it would reduce output of certain products due to the thinner shortage. Since cargo boxes require a wider range of paints compared to ordinary passenger vehicles, they may be hit even harder.
Raw material costs have surged due to supply constraints. Michelin Tire Japan decided to increase domestic summer tire transport prices by 3–5% starting June. Deputy President Shinsuke Matsui of Denso Automotive Components expressed concerns about the future during a financial results briefing on April 28. In its forecast for the fiscal year ending March 2027, the company anticipates that unstable naphtha supply and other uncertainties in the Middle East could reduce revenue by 4.5 billion yen.
Forty percent of Japan’s domestic naphtha consumption comes from the Middle East, meaning this issue will ripple through the entire automotive supply chain. According to preliminary data released by the Ministry of Finance on April 28, imports of naphtha and other light oils from the Middle East declined by 36.9% compared to the same period last year.
Prime Minister Kōshi stated at a ministerial meeting on the Middle East situation on April 30 that, thanks to efforts to promote alternative procurement from outside the Middle East—such as the U.S. and Peru—the domestic supply of chemical products derived from naphtha is expected to remain stable beyond the end of the year.
Government sources claim that petrochemical manufacturers have supplied sufficient petrochemical products. However, anxiety among manufacturers and construction firms regarding naphtha supply remains unresolved, with many companies deliberately stockpiling naphtha derivatives. This has led to distribution bottlenecks and market shortages.
Sho-ryō Honda, Chief Economist at Sumitomo Group Global Research, pointed out: "If companies pursue high profits through speculative stockpiling, the balance between supply and demand could be disrupted, leading to continued low supply levels."
Original article: toutiao.com/article/1864580463632395/
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