Naphtha Shortages Hit Japan’s Factory Floor

Naphtha Shortage Grips Japanese Industry

Japanese firms that rely on naphtha, a key oil by‑product used in adhesives and paints, are cutting orders or lowering production after delivery delays and price hikes. The trouble began last week when more than a dozen companies—including Toto and Asahi Kasei—warned that their supplies were unreliable. Smaller manufacturers of thinner‑based products, such as Kansai Paint, also faced shortages; only 2.7 % of businesses can still get the material at normal levels, according to a recent survey by the Painting Contractors Association.

The government has repeatedly assured that Japan can meet demand for four months, citing new sources outside the Middle East. Yet industry officials say the bottleneck lies in wholesalers who have already cut shipments to customers for April, fearing uncertainty later in the year. Prime Minister Sanae Takaichi has urged the economy to stay strong and has not called for public conservation measures, a stance that some officials worry could spark consumer panic similar to the 1970s oil crisis.

Shares of naphtha‑dependent companies such as Toto, Kansai Paint and Mitsubishi Chemical have lagged behind the Nikkei index. Analysts warn that even if production could be ramped up, firms might end up holding expensive inventory if prices fall later. The administration’s focus on economic stability has been described as a “whack‑a‑mole” game by market observers.