Mitsubishi Chemical Coke Business Withdrawal Triggers JPY 85 Billion Loss

On February 2, Mitsubishi Chemical coke business withdrawal was formally announced as the company confirmed its decision to exit operations related to coke and carbon materials used in blast furnace steel material production. The move follows prolonged market weakness that has made sustained profitability increasingly difficult.

Mitsubishi Chemical Coke Business Withdrawal and Market Pressures

Mitsubishi Chemical explained that low-priced coke supplied by Chinese manufacturers has continued to erode market conditions. Persistent price pressure, combined with declining margins, led the company to conclude that maintaining profitability in the coke and carbon materials segment was no longer feasible. The situation has been compounded by sluggish global demand for steel materials, particularly in China. As steel production slowed, demand for coke weakened further, intensifying competition and accelerating the deterioration of the market environment.

Impact of Chinese Oversupply and Global Capacity Expansion

Despite earlier efforts to stabilize operations, global oversupply has remained unresolved. Overproduction in China has continued, while the start-up of large-scale coke facilities in Indonesia has added further capacity, extending the downturn and limiting any meaningful price recovery.

Financial Impact of Mitsubishi Chemical Coke Business Withdrawal

As a result of the withdrawal, Mitsubishi Chemical expects to record a total loss of approximately JPY 85 billion. This includes a fixed-cost impairment loss of about JPY 19 billion for the October–December 2025 period (Q3 2025). In addition, the company anticipates around JPY 66 billion in expenses during the January–March 2026 period (Q4 2025). These costs are primarily related to equipment removal and employee support measures associated with the business exit.

Structural Reforms and Exit Execution

The company had already been implementing structural reforms since August 2024, scaling down its coke production system in response to stagnating market conditions. However, continued oversupply and weak demand ultimately led to the decision that a full withdrawal was necessary to prevent further financial strain. By exiting the coke and carbon materials business, Mitsubishi Chemical aims to limit ongoing losses and redirect resources toward areas with stronger long-term profitability, marking a significant shift in its industrial materials strategy.