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Photo courtesy of Lotte Chemical |
[Alpha Biz= Kim Jisun] Lotte Chemical will shut down its 1.1 million-ton naphtha cracking center (NCC) at the Daesan petrochemical complex, following a self-restructuring agreement with HD Hyundai Chemical. The decision comes as Korean petrochemical producers face severe market pressure from China-driven oversupply.
According to industry and financial authorities on the 25th, the two companies agreed to consolidate their NCC operations at Daesan. Lotte Chemical will cease operations at its facility, while HD Hyundai Chemical will operate its 850,000-ton cracker as the unified plant. Lotte will transfer its Daesan facilities to HD Hyundai Chemical, which will contribute cash to create a 50:50 joint venture.
Once consolidation is complete, the Daesan complex’s ethylene capacity will shrink from 1.95 million tons to 850,000 tons, achieving roughly one-third of the government’s voluntary capacity-reduction target for the sector. Korea’s petrochemical industry previously committed to cutting 18–25% (2.7–3.7 million tons) of national NCC capacity amid long-term oversupply concerns.
The move is expected to accelerate restructuring discussions at other major complexes—including Yeosu (LG Chem, GS Caltex, Yeochun NCC) and Ulsan (Korea Petrochemical, SK Geo Centric, S-Oil)—as the industry pursues coordinated downsizing to avoid losses from unilateral reductions.
Alphabiz Reporter Kim Jisun(stockmk2020@alphabiz.co.kr)
