South Korea will continue to rely on China’s consumption to enhance its petrochemical production, but the strong demand witnessed in 2009 may not be repeated this year, as per ICIS. Additional Chinese demand for South Korean petrochemicals was witnessed as rivals in Taiwan could not meet demand on plant problems. Weakness of the Korean currency, the won, provided South Korea an edge over rival Japan in capturing a good share of the Chinese market.
Driven by strong demand for flat-screen televisions, China imported from Korea a record 98,760 tons of polymethyl methacrylate (PMMA) in 2009, a 70% rise vs 2008 as per data from the Korea International Trade Association (KITA). Also, 14% more polyethylene (PE) totalling 1.34 mln tons was exported in 2009, and 30% more polyvinyl chloride (PVC) was exported, rising to 666,401 tons.
But new petrochemical capacities coming on stream in the Middle East, China, Thailand and Singapore this year will impact South Korea’s export demand. Additionally, changes in monetary policy in an effort to cool down a possible overheating Chinese economy may have some negative repercussions on its neighbouring countries, particularly those that look to it for export support.