Japan's industrial production fell in March due to a decline in chemical and fuel product output

Golden Ten Data reported on April 30 that data released by the Japanese government on Thursday showed that due to supply disruptions in the Middle East leading to decreased production of chemical and fuel products, Japan’s factory output in March recorded an unexpected month-on-month decline. Japan’s industrial production in March fell by 0.5% compared to the previous month, marking a second consecutive month of decline and falling short of market expectations of a 1.1% increase. Products made from petroleum were the main driver of this decrease; in March, polyethylene production dropped by 27%, and polypropylene production fell by 15%. However, the Ministry of Economy, Trade and Industry (METI) stated that Japan’s inventories of these intermediate chemical products could still cover 1.8 months of consumption, and thus the impact of this incident on downstream deliveries can be largely minimized. Data also showed that Japan’s domestic fuel output generally declined in March, with gasoline production dropping by 7.3% and diesel production decreasing by 14.3%. About 95% of Japan’s crude oil is imported from the Middle East, with most transported via the Strait of Hormuz.