South Korea’s petrochemical industry expected to rebound

15-Jan-14

South Korea’s petrochemical industry is expected to bounce back in 2014 on the back of a pickup in demand from key markets such as China, the Ministry of Trade, Industry and Energy (MTIE) said Tuesday. But leading petrochemical companies, led by LG Chem and the Korea Kumho Petrochemical Co. (KKPC), need to address upcoming challenges caused by deepening competition with global players, as per koreatimes.co.kr. Steps are underway to improve the ongoing Korea-China Free Trade Agreement to bring substantial benefits to the local petrochemical industry. In a related issue, the Korea Petrochemical Industry Association (KPIA), issued a statement that it expects demand for ethylene to rise by 3.8% this year, while supply growth is forecast to remain at 2.8%. Indication of economic recovery in developed countries and limited growth in factory outputs are aiding the sector. The KPIA expects Korea’s exports of petrochemical products to exceed $50 billion this year for the first time. However, competition is expected to get more intense mostly due to advancements in the technological level of their Chinese rivals, resulting in a spreading out of products below the market price.