Japan is currently turning to China for essential chemical supplies due to a major disruption in its usual raw material pipeline.
The recent surge in Japanese imports of Chinese chemicals, as reported by Nikkei, is a direct response to a severe supply shock. This situation unfolded through a clear chain of events. First, the primary trigger was the traffic halt in the Strait of Hormuz in March 2026. Japan is highly dependent on the Middle East, sourcing over 90% of its crude oil and about 40-45% of its naphtha—the lifeblood of its petrochemical industry—from the region. This disruption immediately threatened the stability of its domestic production.
Consequently, this feedstock shortage created a ripple effect across Japanese industries. The lack of naphtha directly constrained the output of primary chemicals. We saw evidence of this when major producer Tosoh delayed the restart of an ethylene plant. The impact quickly spread downstream, with companies like TOTO, a major bathroom fixture maker, halting orders for products due to a scarcity of necessary plastic materials. This highlighted a critical vulnerability in Japan's supply chain.
In response, the Japanese government took decisive action. The Ministry of Economy, Trade and Industry (METI) explicitly encouraged companies to import intermediate chemicals, such as ready-made plastics, to bypass the domestic production bottleneck. To facilitate this, they even temporarily lowered the mandatory private-sector stockpiling obligations, signaling strong policy support for this strategic pivot to imports.
This created a significant opportunity for China. Thanks to a massive expansion of its petrochemical capacity in recent years and robust crude oil reserves, China was perfectly positioned to step in as a supplier. It had the surplus capacity to export large volumes of polymers and other chemicals to Japan, filling the void left by the naphtha shortage. The data confirms this shift: imports of high-density polyethylene (HDPE) from China skyrocketed by 170% year-over-year. However, the situation is complicated by China's recent tightening of export controls on dual-use chemicals, which can add delays and administrative hurdles for some specific materials, creating friction even as overall trade grows.
- Naphtha: A flammable liquid hydrocarbon mixture derived from petroleum, used as a primary raw material for producing plastics and other chemicals.
- Strait of Hormuz: A narrow, strategically important waterway between the Persian Gulf and the Gulf of Oman, through which a significant portion of the world's oil passes.
- Dual-Use Chemicals: Chemicals that can be used for both commercial and military purposes, often subject to stricter government export controls.