Ethylene, often referred to as the "mother of the chemical industry," is witnessing an unprecedented supply chain earthquake in its market and maritime shipping. The conflict, through the dual pressures of physical production disruptions and logistics channel blockages, is reshaping the landscape of global chemical trade.

According to a report by Nikkei Asia on March 7, major Japanese petrochemical firm Idemitsu Kosan has notified its business partners that it may halt ethylene production in Japan if the closure of the Strait of Hormuz persists and obstructs raw material imports from the Middle East.

The facilities at risk of shutdown are its Tokuyama Plant in Yamaguchi Prefecture and Chiba Plant in Chiba Prefecture, with annual ethylene capacities of approximately 620,000 tons and 370,000 tons respectively. Combined, they account for around 16% of Japan’s total ethylene output.

It is reported that Idemitsu Kosan’s Chiba Plant conducts crude oil refining and produces ethylene using both naphtha from the refining process and imported naphtha. The Tokuyama Plant relies entirely on imported naphtha for ethylene production.

Japan’s crude oil reserves can sustain supply for about 250 days, but its naphtha stockpiles only last for roughly 20 days.

Japan is home to 12 ethylene production plants, with a total annual capacity of approximately 6.16 million tons, operated by major refineries and petrochemical companies.

Nikkei Asia noted that companies vary in their dependence on imported naphtha, particularly from the Middle East. However, if tensions in the Persian Gulf continue, other ethylene producers may also need to reduce output or suspend operations.

Mitsui Chemicals, which runs two plants in Chiba and Osaka prefectures, stated that it is assessing how long its naphtha supplies can last. The company is also considering increasing naphtha procurement from regions outside the Middle East, including domestic sources in Japan.

Maruzen Petrochemical, a subsidiary of Cosmo Energy Holdings, operates a facility in Chiba Prefecture. A company representative said: "While We do not expect any impact on production before March, we are exploring measures to secure stable supply."

Amid restricted naphtha supplies from the Middle East, some companies have invoked force majeure clauses to seek exemption from supply obligations due to circumstances beyond their control.

Chandra Asri Pacific, Indonesia’s largest chemical company, declared force majeure at its domestic petrochemical facilities on March 3 local time.

PCS, a Singapore-based ethylene producer, also issued a force majeure notice on March 5 local time. Approximately half of the company’s naphtha supply comes from the Middle East.

Under the shadow of the conflict in the Middle East, the ethylene market is trapped in a dual dilemma of production halts and export blockades. About 15% of global ethylene supply has been directly affected. Rerouting shipments around the Cape of Good Hope has caused capacity losses and war risk premiums, making transportation costs for remaining supplies extremely expensive.

Following the disruption in the Middle East ethylene market, the United States is the only major player capable of large‑scale supply replacement, while China acts as a stabilizer in regional markets. By contrast, Japan, South Korea, and Southeast Asia are struggling with raw material shortages and may shift from being suppliers to net buyers.

This geopolitical storm has not only driven up chemical prices but also exposed the fragility of global supply chains, forcing global buyers to re‑evaluate supply chain security and diversification strategies.