Iran War and Today's
(April 11) Top 20
Naphtha-Related Japan News

Japan's monthly procurement volume of naphtha from outside the Middle East is expected to double in April from the usual 450,000 kiloliters to 900,000 kiloliters, a senior METI official announced. Major producers including Mitsui Chemicals, Mitsubishi Chemical, and Asahi Kasei are sourcing from the U.S., South America, Africa, and Central Asia. Higher procurement from outside the Middle East could extend inventory coverage to more than six months, the official said.

U.S. naphtha contains more Light Straight Run (LSR) components than Middle Eastern naphtha, resulting in lower aromatic yields. Manufacturing sites are rapidly redefining cracker temperature and pressure settings based on product portfolios.

Excessive freight costs from remote regions (North/South America) are squeezing chemical manufacturers' margins. The government began hearings with industry groups today to draft an "Emergency Procurement Support Subsidy" framework.

With inventories of naphtha-derived thinners and solvents depleting, the government requested manufacturers to prioritize supplies for "essential industrial products," including medical devices and infrastructure repair materials.

Indonesia's Chandra Asri declared force majeure on all contracts as Middle East naphtha supplies collapsed. Indonesia imports 100% of its annual naphtha requirement (~3 million tons) and sourced ~70% from the Middle East. The government is seeking alternative supply from Africa, India, and the U.S. Meanwhile, Indonesia later announced (April 28) a policy to cut import duties to 0% on PP, LLDPE and HDPE for six months to support its domestic plastics industry. Note: an earlier draft of this report incorrectly stated Indonesia was considering naphtha export restrictions; in fact, Indonesia took the opposite approach of tariff reduction to ease domestic supply.

In response to volatile feedstock markets, HMEL introduced an ARS-linked (Automatic Rate Setting) incentive scheme for polypropylene and polyethylene in the domestic Indian market for April — a pricing mechanism the company has used periodically, where price adjustments are tied to benchmark indices to reduce buyer risk during high-volatility periods.

As domestic supply falters, trading houses have initiated emergency imports of Chinese PP/PE. Technical data as of April 11 confirms physical stability in precision molding, leading to adoption by major domestic manufacturers.

The use of biomass naphtha made from waste cooking oil is accelerating as a substitute for virgin naphtha, functioning as both an environmental measure and supply route redundancy.

Supply of naphtha-derived solvents is limited to below 50% of normal levels. Paint manufacturers are tightening shipment adjustments and proposing transitions to alternatives like water-based coatings.

Japanese refineries ran at 67.8% of designed capacity for the week to April 11 — well below the 80%+ seen before the Iran war — as they await alternative crude from outside the Gulf (Petroleum Association of Japan / Hydrocarbon Processing, 4/15). ENEOS, Japan's largest refiner, has secured substitute crude supplies through around August and begun discussions on upgrading refinery equipment to process a wider range of crude grades, in consultation with the government. Mixing U.S. and West African light-sweet crude with existing grades is expected to increase yields of gasoline and naphtha while reducing diesel and jet output.

Tests were conducted at a domestic industrial complex to switch plant heating fuel from naphtha to Liquefied Natural Gas (LNG) or hydrogen to reserve naphtha for use as a raw material.

"LPG co-firing" technology, which uses LPG as a feedstock for ethylene production, is expanding. Increased LPG supply capacity was confirmed at multiple complexes today.

As alternative procurement from the U.S. and Americas accelerated, Japan's own port workers threatened disruption: the National Federation of Port and Harbor Workers' Unions issued an indefinite nighttime cargo-handling refusal notice effective April 20 (filed April 2). A basic agreement was reached on April 15, postponing the ban — but with final negotiations not until April 28, exporters faced an uncertain window. The strike was ultimately settled April 28. The episode highlighted how a domestic logistics disruption could compound the external supply crisis at a critical moment. Note: an earlier draft referenced U.S. East Coast port strikes, for which no specific April 2026 evidence was found; the confirmed event was the Japan domestic port labor dispute.

The impact of soaring naphtha prices has reached the textile sector. Major companies like Teijin have decided to pass increased raw material costs onto product prices.

Unlike crude oil, there is no legal mandate for naphtha stockpiling. Public and private sectors began formal discussions today on legislation to protect industry during emergencies.

The importance of extracting naphtha from condensate (ultra-light crude oil) is growing. Trading firms are moving to make emergency purchases from regions like Australia.

Lead times for specialized resins — which involve complex naphtha-derived processes — are now "undetermined" or exceeding six months as of today.

Projects to produce "Recycled Naphtha" from waste plastic are gaining momentum. Companies are accelerating the commercialization of oil-conversion plants to secure alternative feedstock sources.

Shortages in high-purity solvents used in semiconductor manufacturing have been reported. Concerns are growing regarding the impact on the global supply chain for advanced electronics.

Beyond raw materials, rising fuel costs for transportation are being reflected in final prices of plastic pallets and containers. A comprehensive review of logistics efficiency is now a priority.