Petrochemical demand destruction in the auto sector has been extensive in Japan since the March 14, 2011, earthquake and tsunami hit Japan's Sendai Prefecture, according to industry estimates.
IHS Automotive estimated in a report Monday that through March 25, Japan will lose production of about 337,683 vehicles. Using an American Chemistry Council estimate of each light vehicle containing 81 pounds of polypropylene, this amounts to reduced PP consumption of about 27,352,323 pounds (12,407/mt).
North American auto production has also been impacted as key auto parts produced in Japan are no longer coming to the US. On March 17, GM shut its Shreveport, Louisiana factory from the supply disruption, which has lead to a loss of output of 260 units/day. Honda has also halted production at a CKD plant in El Salto, Mexico as of March 21 that is to see the loss of 225 units/day, IHS said.
In Europe, staged downtime at GM plants were expected to see a loss of 1,300 units/day. Volvo's output was expected to be impacted only in early April when component supplies would be depleted. Also, Japanese OEM's in Europe are reliant to varying degrees on Japan for powertrains and electronic components. Though there have been no shutdowns yet, Honda and Toyota have cancelled all overtime work, IHS added.
In India and the ASEAN region, IHS estimated that loss of supplies from Japan to Toyota, Honda and Nissan plants would begin to curtail production by as much as 17,000 units/day beginning at the end of March.
Below is an estimate of petrochemical consumption loss from an auto production loss of 337,683 units in Japan and 1,525 in North America. The figures are to continue rise until industrial production can begin again in Japan.
Material lbs/vehicle* Demand loss Japan Demand loss in N America (lbs) (lbs) Polypropylene 81 27,352,323 123,525 Polyurethanes 59 19,923,297 89,975 Nylon 40 13,507,320 61,000 ABS 25 8,422,075 38,125 Polyvinyl chloride 24 8,104,392 36,600 Thermoplastic polyester 21 7,091,343 32,025 Polycarbonate 14 4,727,562 21,350 Polyethylene 13 4,389,879 19,825 Polyethylene ether 13 4,389,879 19,825 Unsaturated polyester 13 4,389,879 19,825 Phenolics 10 3,376,830 15,250 Polyvinyl butyral 7 2,363,781 10,675 Polyacetal 6 2,026,098 9,150 Acrylics 5 1,688,415 7,625 Other resins 5 1,688,415 7,625 *American Chemistry Council
