INTERNATIONAL
Japanese Exports A r e n t U n b e a t a b l e J A P A N ' S chemical industry is not a n un
beatable competitor in everything pro duced. It can produce and sell some products below world prices. But i n others, Japanese costs are above world levels. With the large-tonnage fertilizer, am monium sulfate, for instance, Japanese producers are breaking even or losing money. Vinyl chloride is being ex ported in increasing quantity at drasti cally cut price levels. A n c in polyethylene, which is just starting production in Japan, the costs
will be high. It i s doubtful, say W . R. O a c e ' s William Copulsky a n d Fred Shinagel, if Japan's polyethylene can be shipped into world markets competi tively within the next five years. • Export Torge** Japan's export tar get for nitrogen fertilizers in 1958-59 has been set at 1.9 million metric tons of ammonium sulfate, or 400,000 tons of nitrogen. With domestic demand e x p e c t e d to increase only slightly, this export objective is about double that of !9"->8. I n t h e past, 90'f of these exports
More Chemicals Hit World Market (Japanese Consomption and Exports)
Ammonium Sulfate
Contained Nitrogen thousands o f metric tons
th ousands of metric tons
Year
Consumption
Exports
1954 1955 1956 1957 1958
515 560 630 640 650
100 110 140 160 200
Source:
Year
Consumption
Exports
1954
1600
500
1955
1700
1956
1800
400 500
1957
1800
700
Source: J*a panese T r a d e a n d Industry.
i \ikma.n. Ltd.
of
International
Polyvinyl Chloride
Urea
thousands of metric tons
thousands o f metric t o n s
Year
Consumption
Exports
1QK/1
125
Q
1955
172
0
1956
203
60
1957
253
112
Japanese Source: T r a d e a n d sr• d v s i r y .
5 2
Ministry
C&EN
Ministry of
APRIL
6,
International
1959
Year
1954 1955 1956 1957 1958*
Consumption
0 35 66 104 68
Exports
0 c
1 5 17
* estimated Source: i G panese iT-»ini5*ry Οι «nternaîionQi T r a d e a n d I n dustry; Customs Divisio η , J a p a n e s e Artirissfry o f Firs onee.
have been going to Taiwan, Korea, and Red China. T h e Chinese market would appear to be impossible now, and part of the contract between Red China and japan has been canceled for political reasons. Further, all of these areas are increasing their local output. Japan's maximum domestic sulfate price last July was set a t $35 per metric ton, a decrease of 5r< from the previous year. Many producers with obsolete equipment cannot make a profit at this price. • Urea Outlets Sought. Until re cently, Shinagel told the ACS New York Section's chemical marketing and economics group, 2 5 ' i of Japanese urea was exported, mostly to Korea. Korean urea plants are d u e to go on stream soon and the Japanese are currently seeking world markets. Recent Japanese bids on large F a r Eastern urea business re flect low costs. In Japan, price is $77 to $95 per metric ton, f.o.b. Exported Japanese urea goes for $96 to $103 in Europe a n d $125 in the U, S. Present Japanese urea capacity is over 600,000 tons a year, second only to that of the U. S., which is 800,000 tons. Capacity for the rest of the world is about 500,000 tons. Polyethylene consumption has grown rapidly in Japan—from 300,000 pounds in 1951 to about 37 million pounds in 1957, a n d an estimated 66 million pounds in 1958. Despite initiation of domestic production, Japan will have to import one half of its polyethylene needs in t h e near future. It appears unlikely that in the next five years Japanese polyethylene will threaten U . S. producers, Shinagel says. But the U . S. will eventually lose the large Japanese export market which totals more than 5 % of U. S. output, h e adds. • Vinyl Competition. Japan's vinyl chloride production is based on acety lene generated from calcium carbide. T h e country has been able to expand PVC output from 22,000 metric tons in 1954 to 109,000 tons in 1957. And production of 170,000 tons is planned
Polyethylene: Newcomer to Nippon Capacity, Millions of Pounds
Scheduled Production Company
Date
Mitsui Sumitomo Mitsubishi Showa Furukawa Sumitomo
On stream On stream Dec. 1958 Spring 1959 Spring 1959 Spring 1960
Process Ziegler (low pressure) Imperial Chemical Industries
25 25
Imperial Chemical Industrie» Phillips (low pressure)
25
M e d i u m pressure
25
Imperial Chemical Industries Total
A°L 155
NOTE: Japanese consumption of polyethylene is estimated at 56 million pounds in Î95S. Source:
Plastics Industry News (Japan).
COMMENT Are we moving toward a normal and satisfactory pattern of international trade? . . . In one sense [the A m e r i c a n record] is satisfactory beyond all expectations. Thanks to your economic growth, total imports into the U. S. have . . . practically doubled over the last 10 years. We in the U. K. . . . have worked hard to take advantage of the wide opportunities in your markets. And these efforts have been successful in many directions. But we must ask ourselves whether the remarkable things to which 1 have referred go far enough in the critical circumstances of today. . . . I do not believe that we ham yet thought through what it is necessary to do. But I am clear about one thing. The demands of our age cannot be wholly met by a policy of gifts and charity. You do not hold nations together on that basis. Especially when men think a hoi war is unlikely, aid is not a substitute for trade. A man toill take your money, of course he will, but it will not make him like you or bind him to you in anything approaching the same ivay as if you do business with him, and allow him to earn the dollars ami the
pounds he needs to pay for his essential imports. This means more liberal trading policies than we practice today. . . . First take the quotas on lead and zinc. The announcement of these quotas designed to protect high cost production in the U. S. created the greatest concern during the Montreal Economie Conference. Australia and Canada in particular felt that this restrictive action was contrary to the general economic policy which a creditor country and a very friendly country should pursue. The same is true of restrictions on the import of oil. . . . . . there is the wool tariff quota, in imposing which the U. S. authorities are certainly acting within their treaty rights. . . . Ζ am sorry that the V. S. Government should have felt compelled to do this and to do it in the way they have. We have repeatedly pro tested against this measure, point ing out that it must hit unfairly high quality cloths, in which fash ion counts a good deal, and must favor staple cloths which can be stocked against the period when the lower duty quota is open. We are not asking for special favors, but you cannot expect us to be satisfied when the arrangements continue to favor Japan at the expense of the U.K. . . .
for 1960, n o t w i t h s t a n d i n g inventory i n creases w h i c h h a v e p l a g u e d industry in t h e past. P V C prices hroke from 2 4 t o 2 5 cents per p o u n d in 1 9 5 5 - 5 6 t o 16 V - to 2 2 c e n t s in t h e last quarter o f 1 9 5 7 . C a pacity expansion w a s t h e major factor. Demand also began slowing u p i n 1957 as t h e result of tight m o n e y . Exports of vinyl resins a n d p r o d u c t s w e r e about 2 0 0 0 metric tons in 1 9 5 5 , a n d 1 0 0 0 tons in Î95Ô. T h e y j u m p e d t o 54O0 tons in 1957» and to an e s t i m a t e d 1 6 , 5 0 0 tons in 1 9 5 8 . Shinagel says import d u t i e s o n vinyl plastics d o not s t o p J a p a n e s e imports. T h e U. K. duty is lOVr, and t h e U. S. d u t y is 35',*. T h e U . S., w i t h 1 billion p o u n d s capacity a n d sales o f 6 5 0 million p o u n d s , is m a poor p o s i t i o n to resist low-priced imports, S h i n a g e l points out. •
step dismantled the quotas on dollar goods which we had to put on to protect our precarious exchange position. I said at Montreal last September that we hoped to go further in the removal of these quotas this year. We should like to ilo this, but we must be sure we can earn enough dollars to pay for any increase in our imports which would follow. i tvant you to knotv thai our concern at the increased number of examples of protectionism in America is not only due to the loss of dollar earnings by this country. We have to think of the economic well-being of the Free World as a whole. . . . We appreciate that the U. S. administration has its own very real problems and difficulties. . . But you and we have always realized that interdependence tcould involve efforts and sacrifices. If the Free World is not prepared to make these, the outlook is indeed black—or perhaps I should say red. We cannot expect the U* S. to carry the whole burden, but it is only by accepting a major share of the harden, particularly in respect of trade, thai the XJ. S. can maintain its claim to a leadership which others will be glad to foliota. SIR D A V I D E C C L E S , P r e s i d e n t , U . K. Board of Trade, b e f o r e A m e r i c a n C h a m b e r of C o m m e r c e
ïéti€,
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6,
1959 C & E N
53
