MOSCOW (MRC) -- Japan's trading firms have struggled to stay competitive in the energy trading business in recent years as domestic oil demand has dwindled and crude's low price volatility has depressed margins, said Plastemart.
Amid tighter regulation reshaping the energy trading industry, large international trading firms such as Trafigura , Vitol and Glencore have gained prominence in the business. Japanese trading house Marubeni Corp is refocusing its energy trading on naphtha and liquefied natural gas (LNG) and away from crude, as it targets becoming a niche market player in a tough environment, as per the head of business in Reuters. "The role of Japanese trading firms is changing," Yasuaki Suzuki, general manager of Marubeni's energy trading department said. "In the past, we traded almost everything, but with low margins and hard competition, the Japanese traders are now increasingly becoming niche players, concentrating more on certain products," said Suzuki.
The company traded around 11 mln tons of naphtha last year, but a current depressed market makes it hard to increase volumes. Marubeni no longer has fuel oil storage capacity in Singapore and has cut staff in its office there, although it plans to keep overall headcount in the company's energy trading department intact.
Weak Asian demand and rising global supply have triggered a drop in oil prices in recent months, as producers in the key Middle East region show little sign of curbing supplies. The current glut of crude oil in Asia is likely to persist for now, as producers engage in a fight for market share that will take oil prices even lower.
As MRC wrote before, Marubeni Corporation concluded an off-take agreement with Nghi Son Refinery and Petrochemical Limited Liability Company, the operator of the Nghi Son Refinery & Chemical Complex in Vietnam, for its products, namely polypropylene and sulfur.
Marubeni is delighted to be a support of the first Japanese-owned refinery & chemical complex located outside of Japan in terms of stable operations by committing to long-term off-taking and is willing to continue its contribution to the emerging Vietnamese economy for further development.
MRC