Japan's petrochemical sector will need to consolidate in response to heightened competition from emerging petrochemical complexes in China and the Middle East, the head of the country's oil industry body said on Monday.

"We anticipate that the operational landscape for petrochemical equipment in Japan will prove challenging in the upcoming year, given the impending commissioning of various new complexes," Shunichi Kito, president of the Petroleum Association of Japan (PAJ), told a news conference.

For Japanese petrochemical companies already grappling with a tough earnings environment, the export of olefin like ethylene is expected to worsen, said Kito, who is also the president of oil refiner Idemitsu Kosan.

"I believe that consolidations within the petrochemical industry, or efforts to enhance efficiency and rationalise operations, will inevitably become imperative," he said.

China is adding new petrochemical capacity despite a global glut as the country's refiners diversify from transport fuels, threatening to depress margins worldwide through 2024 as weak economic growth saps demand. (Reporting by Yuka Obayashi, Editing by Louise Heavens)