Brutal Arithmetic: After Japan chose 'Cannons over Butter,' how many people will die this summer?

First, consider the number—12 days. Japan is the world’s second-largest LNG importer, with roughly 30% of its electricity generated from natural gas. Its pillar industries—including steel, chemicals, semiconductors, and automobiles—all depend critically on natural gas. As of the first week of March 2026, power utilities’ LNG inventories are sufficient for only 12 days; total national natural gas reserves would last at most 21 days. On March 10, Japan’s Ministry of Economy, Trade and Industry (METI) urgently convened a government–industry coordination meeting to confirm activation of cross-facility LNG redistribution mechanisms—meaning reserves have entered active drawdown. A 12-day inventory equals just three weeks’ worth of supply. And that’s not all. Next, consider the number—254 days. Japan touts having the world’s most advanced oil reserve system, with a theoretical 254-day stockpile. Yet due to Middle East hostilities, traffic through the Strait of Hormuz has nearly ground to zero. Starting March 16, Japan released approximately 80 million barrels of strategic petroleum reserves—equivalent to 45 days’ consumption—the largest single release since the national oil reserve system was established in 1978. An additional release covering roughly 20 days’ usage is scheduled for May. While stocks dwindle, Japan is forced into emergency drawdowns. Alternative oil supplies won’t arrive at Japanese ports until June at the earliest. By then, soaring summer temperatures and surging electricity demand will push oil reserves far lower than they are today. That ‘254-day’ figure is purely theoretical; in reality, Japan is burning precious reserves to plug immediate economic gaps—not saving them for summer emergencies. Local governments are well aware: Chief Cabinet Secretary Toshimitsu Motegi publicly acknowledged in a press conference that national LNG reserves amount to only “about three weeks’ consumption.” Knowing the problem but lacking solutions—that is the dead end. Most critical of all is naphtha. What is naphtha? It is the “rice of industry”—the essential feedstock for plastics, medical consumables, and insulating materials. Over 40% of Japan’s naphtha is imported directly from the Middle East; even the remaining ~40% labeled “domestically produced” relies on Middle Eastern crude for over 90% of its raw material. A closure of the Strait of Hormuz thus blocks both supply routes entirely. The result: spot naphtha prices have surged 60% since the outbreak of hostilities, while domestic inventories can sustain operations for only about 20 days. Major firms—including Mitsubishi Chemical, Idemitsu Kosan, and Sumitomo Chemical—have already been forced to reduce cracking unit loads or delay restarts. With only 20 days’ inventory left, once it runs out, there will be none. And if naphtha supply halts, downstream products—including dialysis tubing, syringes, medical gloves, and insulating materials—will vanish entirely. Chapter Two: Electricity—An Aging Grid with Zero Redundancy, Bracing for Inevitable Summer Heat Underpinning the energy crisis, an electricity collapse is all but inevitable. As early as October 2025, Japan’s Agency for Natural Resources and Energy (under METI) issued a warning: by August 2026, Tokyo Electric Power’s reserve margin will plummet to just 0.9%. Anyone familiar with power systems knows the safety threshold for stable supply is 3%. At 0.9%, any single power plant trip—or even a minor temperature forecast error—could trigger widespread, prolonged, and unannounced physical blackouts across the Greater Tokyo Area. Multiple large thermal power plants are undergoing synchronized maintenance shutdowns, reducing annual generation capacity by approximately 2.56 million kilowatts compared to fiscal year 2025. New LNG-fired generation capacity won’t come online until after 2029—a classic case of “old capacity phasing out before new capacity ramps up.” Even more alarming is Japan’s grid itself, which is aging rapidly and suffering increasingly frequent failures.

Numerous chemical plants are disappearing rapidly.

Can you believe it? The birthplace of the Industrial Revolution—Britain—is on the verge of losing its ability to produce ethylene? Ethylene is a vital chemical feedstock: polymerized into polyethylene, it serves as the raw material for plastic production. Yet ethylene plants across Britain are shutting down one after another. Last year, SABIC closed its Teesside facility in the UK; in February this year, ExxonMobil announced the imminent closure of its Mossmorran ethylene plant in Scotland. Once these facilities close, only one ethylene production base will remain in Britain—the Grangemouth plant in Scotland. To preserve this last lifeline, the UK government provided £125 million in combined subsidies and loans at the end of last year. Britain’s chemical plant closures are no isolated European anomaly. According to incomplete statistics, between 2023 and 2024, Europe announced the closure of over 11 million tons of chemical production capacity. The petrochemical industry is vanishing rapidly from the European map. Petrochemical production is highly carbon-intensive. Already facing rising production costs and stringent decarbonization mandates, the sector had been gradually withdrawing from Europe even before the war. The 2022 Russia–Ukraine conflict accelerated this exodus dramatically. Oil and natural gas serve both as raw materials and primary energy sources for Europe’s petrochemical industry. But the EU’s abrupt energy decoupling from Russia sent input and energy costs soaring—pushing many companies beyond viability and forcing plant closures. Similar trends are unfolding in Japan: Toray Industries has ceased producing purified terephthalic acid (PTA) domestically, and Maruzen Petrochemical shut down its ethylene plant in Chiba Prefecture this year. Over the past two decades, Japan’s refining capacity has declined by roughly 40%. As refining capacity erodes across Europe and Japan, China’s refining capacity has surged to the world’s largest—approximately 980 million tonnes annually. China’s petrochemical industry has grown substantially in scale—but still lacks sufficient high-end capacity. Domestic self-sufficiency in premium polyolefins stands at only 65%, leaving ample room for industrial upgrading and import substitution. Last year’s anti-overcompetition campaign included comprehensive assessments of aging facilities, mandating the phaseout of inefficient units operating for over 20 years in refining, fertilizer, and related sectors. This initiative aims to eliminate backward capacity, consolidate industry concentration, and drive high-end transformation. Small, outdated, environmentally risky refineries—often dubbed “backyard refiners”—are being eliminated under the anti-overcompetition drive. The beneficiaries are leading petrochemical enterprises, whose stocks feature prominently in the Petrochemical Industry Index. The Petrochemical ETF (159731) tracks the Petrochemical Industry Index. Its top holdings clearly reflect performance shifts among industry leaders—making it a highly flexible instrument for investing in the petrochemical sector. Of course, industrial upgrading alone is insufficient. Essential basic chemical production capacity must be preserved—lest China repeat Europe’s and Japan’s mistakes of excessive petrochemical deindustrialization. This requires learning from those lessons—and ensuring stable supplies of raw materials and energy. Last year, China imported a record 578 million tonnes of crude oil, while gasoline and diesel consumption fell by roughly 4%, dragging down refined product output accordingly. That extra imported crude is partly channeled into petrochemical plants to produce chemical feedstocks—not finished fuels. This “reducing fuel output while expanding chemical production” strategy effectively converts surplus fuel-making capacity into higher-value olefins and aromatics. Another portion reflects China’s strategic decision to replenish national petroleum reserves while global oil prices remain low.

Maruzen Petrochemical to Permanently Shut Down Cracker in Second Half of November

42 mins ago

Maruzen Petrochemical plans to permanently close its naphtha-fed steam cracker in Chiba from late November amid negative margins. The facility produces 490,000 metric tons/year of ethylene, reflecting broader restructuring in Japan's olefins production sector.

chemweek

2026-11-06

Maruzen Petrochemical to Permanently Shut Down Cracker in Second Half of November

Maruzen Petrochemical to Permanently Shut Down Cracker in Second Half of November

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