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Japan Times
13 hours ago
- Business
- Japan Times
Japan's economy is particularly vulnerable amid Middle East conflict
Japan is heavily exposed to turmoil in the Middle East despite being far away and removed from the hostilities, and the crisis is coming at a time when Japan is vulnerable and in no position to absorb shocks that emanate from the conflict. According to the Petroleum Association of Japan, about three-quarters of the country's crude oil imports are shipped via the Strait of Hormuz, a choke point between the Persian Gulf and the Gulf of Oman with Iran on one shore. Iran, which is currently in a military conflict with Israel, has threatened to close the strategic passage. 'A large portion of crude oil and gas is transported through this strait, so any disruption would hinder energy procurement and cause prices to increase sharply," said Yuki Togano, a researcher at the Japan Research Institute. The price of oil is already up about 10% since the conflict began on June 13 — when Israel started destroying Iran's nuclear capabilities — with Brent crude oil futures now trading at about $77 a barrel. Tagano said that if the Strait of Hormuz is closed, the price could jump to $140 a barrel. Takahide Kiuchi, executive economist at Nomura Research Institute, wrote in a recent report that the price of crude could climb to around $120 a barrel. "This time, Iran's regime might possibly collapse. Blocking the Strait of Hormuz might anger China and Middle Eastern nations, but when facing a situation where the regime itself could collapse, it's natural to put every possible measure on the table,' Togano said. According to a report by Zero Carbon Analytics, a research group, Japan is the most vulnerable of the large Asian economies to the disruption of petroleum shipments through the Strait of Hormuz due to its high reliance on Middle East oil. Prime Minister Shigeru Ishiba said on Thursday that the government will implement additional measures from June 26 to prevent gasoline prices from rising above about ¥175 per liter. The average price on Monday was ¥171.2 per liter. Togano said that although measures to contain price increases are important, Japan needs to strengthen policies, including those related to saving energy, to contain fundamental risks arising from reliance on oil imports from the Middle East. Japan is already facing a number of significant economic challenges. The trade war with the United States is affecting exports and threatening auto sales, which are important to the Japanese economy. Inflation is also a problem. It is high and squeezing households, which are struggling to make ends meet as wages fail to keep up with price increases. Rising food prices are particularly worrying. Japan's inflation in May was 3.5%, with the price of rice having more than doubled. If the Middle East conflict continues to push up oil prices, the yen is expected to decline as dollar-buying must increase to pay for energy imports. Even though the yen is traditionally seen as a safe-haven asset, the dollar seems to be attracting higher demand for those seeking a refuge from turmoil, Tsuyoshi Ueno, an economist at NLI Research Institute, wrote in a report on Thursday. On Friday, the yen traded at ¥145.3 to the dollar, from about ¥143.5 when the conflict began. Ueno points out that the yen weakened significantly after Russia invaded Ukraine in February 2022 and oil prices increased. 'If the heightened tensions in the Middle East continue for a long time and oil prices rise and remain high, it will likely become a major factor for the yen's depreciation.'
Yomiuri Shimbun
19-05-2025
- Automotive
- Yomiuri Shimbun
Recycling of Nonferrous Metal Products Gaining Traction; Demand from Leading Companies Rising Amid Co2-Cutting Efforts
Courtesy of UACJ Corp. Thick aluminum plates produced from 100% recycled materials by UACJ Corp. Products made from recycled nonferrous metals such as aluminum and copper are becoming increasingly common and finding favor among leading companies. Major aluminum sheet manufacturer UACJ Corp. from July will sell thick plates made completely from recycled raw materials. This comes against a backdrop of manufacturers receiving these products being more proactive in using recycled materials amid the growing shift to a circular economy. UACJ became able to make and sell 100% recycled items after establishing a system that ensures a stable supply of aluminum scrap from processing wholesalers and other sources. The plates will be sold under UACJ's ALmitas+ SMART brand with the aim of promoting its aluminum product as having a low environmental impact. UACJ expects the plates to be sold to makers of semiconductors and liquid crystal manufacturing equipment. The company said that will be the first attempt in Japan to have such products permanently available for sale as a catalog item, rather than offering them through custom-made special orders. According to the Japan Aluminium Association, almost 100% of casting material such as engine parts is recycled. However, the figure for wrought aluminum including foil and plates is only about 10%, and the overall recycle rate of aluminum is 48%. Large strides are being made in the development of technologies that sort and melt scrap, which will lead to the wider reuse of wrought material. In 2024, Mitsubishi Materials Corp. established the Remine brand, which publicizes the percentage of recycled content in its metal products. The company currently sells six products under this brand. Four of these products, including refined tin ingots, are made using 100% recycled material. JX Advanced Metals Corp. also sells recycled titanium copper alloy and other metals. Smartphones and tablets These moves are a response to requests by leading companies seeking to reduce the carbon dioxide emissions generated along their supply chains. Aluminum and copper are essential for manufactured products such as vehicles and home appliances, and using recycled metals leads to lower CO2 emissions than making them from ore. Products such as iPhones made by U.S. technology giant Apple Inc. already use 100% recycled copper, and Microsoft Corp. sells tablets containing recycled aluminum alloys and rare metals. The administration of U.S. President Donald Trump has slapped additional tariffs on aluminum imports on the pretense of protecting U.S. economic security and has unveiled plans to encourage domestic production of critical minerals. 'The trade risks to Japanese companies are growing due to factors including the U.S. tariff policy,' said Yuki Togano, a researcher at the Japan Research Institute Ltd. 'Advancing the recycling of resources is an important option.'
