Mitsui Chemicals eyes ethanol to boost petrochemical competitiveness

Mitsui Chemicals is exploring a shift in its production strategy by assessing the use of ethanol as an alternative feedstock in its naphtha crackers. The move comes as the company seeks to bolster its competitiveness amid a global glut in petrochemical supplies, particularly driven by a surge in Chinese capacity.

Speaking at the Asia Petrochemical Industry Conference, CEO Hashimoto Osamu explained that while completely overhauling the company’s traditional naphtha crackers isn’t feasible, Mitsui is actively investigating ways to adapt them to accommodate ethanol.

Mitsui joins other Asian producers in reevaluating feedstock strategies, with many exploring alternatives like ethane to navigate declining margins caused by oversupply.

Looking ahead, Osamu predicted further consolidation within Japan’s petrochemical industry by 2030, as companies face sustained pressure from challenging market dynamics. He remains cautiously optimistic, suggesting that petrochemical profit margins may begin to recover in three to four years once the pace of new capacity additions in China begins to decelerate.

Another area of concern for Mitsui is the impact of global trade tensions. Osamu noted that while Japan’s automotive sector has not yet felt the strain, escalating tariffs could eventually disrupt exports to key markets like the United States. “We’re monitoring the situation closely. So far, our automotive clients remain unaffected, but any downturn there could hit our U.S. export volumes,” he warned.