Business Japan housing industry faces disruption amid naphtha shortage

One of my students works for a major Japanese manufacturer of prefabricated houses. Due to the shortage, the company is facing major delays, with homeowners having to wait up to six extra months before moving in.

The "naphtha shortage" linked to rising tensions in the Middle East is beginning to affect Japan's housing industry, with shortages of paint, thinners, insulation materials, and other construction products causing delays at building sites nationwide. The government has maintained that enough supplies have been secured nationwide. Contractors and manufacturers, however, say key materials are still not consistently reaching sites, and some report growing disruption across the supply chain. Bottlenecks appear to be spreading, particularly in areas dependent on chemical-based building materials.

The impact is spreading nationwide. Major developer Mitsui Fudosan has reportedly notified buyers that housing handovers could be delayed due to unstable supplies of construction materials using naphtha-based products. Last month, Toto temporarily halted orders for unit baths because of shortages of adhesives and other materials, while major housing equipment manufacturer Lixil announced plans to sequentially raise prices on toilets, kitchens and other products from August onward. Japan imports roughly 60% of its naphtha from overseas, with more than half sourced from the Middle East, leaving the country heavily dependent on the region.

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The government maintains there are no immediate supply concerns.


Yet:

Sixty-four percent of respondents said they were not convinced by the government's explanation about the naphtha supply, according to a nationwide survey conducted by The Yomiuri Shimbun.

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