Alphabiz - Lotte Chemical Sees Short-Term Earnings Improvement in Q2 Despite Cost Pressures

Lotte Chemical’s Daesan Plant. (Photo: Lotte Chemical)

[Alpha Biz= Paul Lee] Lotte Chemical said on May 11 during its first-quarter earnings call that improving performance is likely to continue in the near term, supported by tight feedstock supply conditions.

“As a positive factor for the second quarter, the tight supply of raw materials is expected to persist, allowing the recent earnings recovery trend to continue in the short term,” the company said.

However, it also flagged downside risks. “On the negative side, a lagging effect is anticipated as sharply increased naphtha purchase prices—driven by the Middle East conflict that broke out in late February—are reflected in actual production in the second quarter,” the company noted.

Looking ahead, Lotte Chemical expressed a cautious mid- to long-term outlook, stating that continued expansions of naphtha cracking center (NCC) capacity in China are likely to weigh on the petrochemical industry.

Alphabiz Reporter Paul Lee(hoondork1977@alphabiz.co.kr)