A worsening naphtha shortage in Japan is rippling through the nation's economy, threatening to halt construction projects and squeezing supplies for everything from garbage bags to essential medical equipment for nearly 5,000 hospitals.
"It would be impossible to procure alternatives for the 15 million kiloliters of naphtha a year that the country sourced from the Middle East," Fumiya Kokubu, a visiting fellow at The Institute of Energy Economics, Japan, and former head of Marubeni Corp., said Monday.
The disruption has already driven the cost of vacuum packaging for one fish processor up from 15 yen to 18 yen per bag. In Shizuoka, rampant shortages of designated garbage bags led to a secondary market where a 500-yen package was sold for 5,000 yen.
The crisis exposes a critical vulnerability in Japan's import-dependent industrial sector. Kokubu warns that widespread shortages of chemical products could begin as early as the end of June, a view that contrasts with the government’s more optimistic supply projections into next year.
The supply chain breakdown, triggered by ongoing shipping disruptions in the Strait of Hormuz, has metastasized from an energy import problem to a full-blown industrial crisis. The inability to secure naphtha, a key petrochemical feedstock, is causing production delays and sharp cost increases.
In the construction sector, work is stalling due to a lack of essential materials derived from naphtha, such as sealants and insulation. "We can't get the sealant material needed to fill the gaps in the outer walls," said Takashi Saito, president of a construction company, noting that projects are now facing significant delays.
The consumer impact is becoming increasingly visible. Multiple cities are reporting shortages of government-designated garbage bags, forcing municipalities like Shizuoka to temporarily allow residents to use other types of bags. The scarcity has created a speculative resale market, compounding problems for households.
The medical sector is under severe pressure, with the shortage affecting the production of basic supplies like syringes, catheters, and IV bags. Government data showed that as of late April, nearly 5,000 medical institutions nationwide were experiencing supply shortages, raising concerns about the healthcare system's resilience.
The broader manufacturing sector is also bracing for impact. Toyota has warned of a potential $4.3 billion hit this year from rising material, energy, and transport costs linked to the conflict. The disruption extends beyond naphtha, with shortages of other critical chemicals like helium and aluminum threatening the production of high-tech goods, including semiconductors.
This article is for informational purposes only and does not constitute investment advice.
