Japan's six major chemical companies adjust their performance expectations

Recently, Japan's six major chemical companies have successively announced their results for the second fiscal quarter of fiscal 2022~2023, and updated their performance expectations
for this fiscal year.
Asahi Kasei, Mitsubishi Chemical, Asahi Kasei and Toray lowered their consolidated net profit forecasts for the current fiscal year, while Shin-Etsu Chemical and Mitsui Chemicals raised their net profit forecasts
for fiscal 2022.

Japanese media analysis said that the deterioration of the performance of each company is mainly due to three reasons
.
The first reason is reduced
demand for chemical products in China and Europe.
Yuko Nakahira, chief financial officer (CFO) of Mitsubishi Chemical, said that demand for resin raw materials in China and Europe has fallen significantly
.
In the Chinese market, the operating rate of customers' factories was sluggish
.
In the European market, the cost of energy such as natural gas has risen, and the profitability of local plants has deteriorated
.
The company lowered its net profit forecast for fiscal 2022~2023 to 132 billion yen, down 26%
year-on-year.
The debuff was wider
than previously anticipated.
In particular, the company noted a sharp decline in sales of its acrylic resins, which are used in auto parts and building materials
.

The second reason is the cancellation of Japan's stay-at-home directive triggered by the new crown pneumonia epidemic, which has caused sales of electronic materials to shrink.

Toray revised its FY2022~2023 net profit forecast to a 13% y/y increase to JPY 95 billion, a 5 billion yen
reduction from its previous forecast.
The company's sales of circuit materials and films were sluggish
.
Asahi Kasei also released a financial forecast that in fiscal 2022~2023, the company's consolidated net profit will fall 20% year-on-year to 129 billion yen, down 35.
5 billion yen from its previous forecast, due to sluggish
sales of high-performance resins.
The company's director, Horie Toshiho, said that the company's high-hopes for battery separator film business demand has also declined
rapidly.
Sumitomo Chemical and the Mitsubishi Chemical Group are also in a slump in display materials
.

The third reason is the high prices of raw materials and fuels, which Japanese companies cannot fully pass on to product prices
.
Keiichi Iwata, president of Sumitomo Chemical, said that the company is struggling to pass on the cost of high value-added products to the price, and that it is time to test the competitiveness and value of each product
.

Shin-Etsu Chemical has signed long-term contracts with customers for 300 mm aperture semiconductor wafers until 2027, effectively reducing the impact of weak semiconductor market conditions
.
Mitsui Chemicals will include proceeds
from the sale of its subsidiary.