According to Japanese media, the Chinese government’s tightening of environmental protection restrictions has left Japanese material processing companies at a loss. In order to limit wastewater and exhaust emissions and resolve oversupply, the Chinese government began to restrict domestic factory production. Centered on general materials, material prices have increased significantly. Japanese companies have previously stopped producing unprofitable general materials and have continued to increase their dependence on China. However, the current supply of general materials is sharply reduced. Against this background, Japanese domestic companies are clearly in chaos.
“We plan to increase the price of nylon fabrics.” Starting around April, fabric manufacturers made such a request to a well-known Japanese underwear manufacturer. At present, the price of caprolactam, the raw material of nylon fabrics, is US$2,140/ton, an increase of nearly 30% from the previous year. “If prices rise further, fabric manufacturers may further demand price increases,” the underwear manufacturer said, showing caution.
According to reports, the reason behind the rise in the prices of these materials is the Chinese government’s commitment to protecting the environment and resolving oversupply.
The report also said that in terms of caprolactam, due to the Chinese government’s restrictions on wastewater and exhaust gas emissions, the operating rate of domestic factories in China has dropped to about 70%.
Reports pointed out that the elimination of equipment by Japanese domestic companies is also one of the reasons for the rise in general raw material prices. Caprolactam is a “universal material” that is difficult to differentiate. The general materials market has deteriorated due to China’s expansion of supply. Many Japanese domestic manufacturers were forced to withdraw from production as a result.
Reportedly, however, China has now begun to limit the operating rates of related materials factories. The relevant person in charge of Japan’s Ube Industries said, “I did not expect China to change its policy so drastically.”
Seki Chenichi, deputy chief researcher at the Japan Research Institute, pointed out that “the Chinese government’s policy began to change around 2015.” “This trend is expected to continue,” he said. (Title: China’s environmental protection policies make Japanese companies nervous: raw material prices are rising)
