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Photo = Yonhap news |
[Alpha Biz= Reporter Kim Jisun] Major domestic petrochemical and steel companies like LG Chem, Lotte Chemical, and POSCO have been shutting down operations due to worsening industry conditions, casting a shadow over the regional economies where these factories are located.
Lotte Chemical, facing deteriorating profitability, has partially halted operations at its second plant in the Yeosu National Industrial Complex. Similarly, LG Chem has ceased production of petrochemical alcohol at its Naju plant in Jeonnam, due to aggressive price competition from low-cost Chinese petrochemical products.
In December last year, LG Chem’s Naju plant had already stopped producing acrylic acid, and now, it has halted alcohol production. The petrochemical industry is tightening its belts as supply oversupply from China and increased logistics and transportation costs weigh heavily on companies.
The four major petrochemical firms in South Korea (LG Chem, Lotte Chemical, Kumho Petrochemical, Hanwha Solutions) have reported an operating loss of 445 billion won as of the third quarter of this year, which is nearly 11 times higher than last year's operating loss of 39 billion won.
While petrochemical companies have cut back on certain production processes, steel companies are facing even harsher challenges, with entire plants being shut down. Last month, POSCO’s Pohang Steelworks 1st wire rod plant began the closure process after 45 years of operation, and Hyundai Steel is also considering shutting down its Pohang 2nd plant in Gyeongbuk.
Alphabiz Reporter Kim Jisun(stockmk2020@alphabiz.co.kr)
