May 16, 2025 [Reuters]- Mitsui Chemicals is studying the use of ethanol as a feedstock in its naphtha crackers to improve competitiveness amid oversupply in the global petrochemical sector, its CEO said on Friday.

“It is difficult to completely change our conventional crackers, so we are studying to modify them to use ethanol,” Hashimoto Osamu, president and CEO of Mitsui Chemicals, told Reuters on the sidelines of the Asia Petrochemical Industry Conference.

Mitsui is one of the several producers in the region looking to change its feedstock from naphtha to other fuels such as ethane as excess petrochemical capacity mainly from China has squeezed margins.

Osamu expects further consolidation in Japan’s petrochemical sector by 2030 due to the challenging market conditions.

He said that petrochemical margins could recover in three to four years after new capacity additions in China slow down.

The company is also concerned about the impact of trade tariffs on Japan’s exports that could affect the use of petrochemicals.

“We are waiting and watching as it is volatile…so far our customers in automotive industry are not impacted but if they are affected, our exports to the USA could get impacted,” Osamu said.

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