FX.co ★ South Korea to Announce Plan to Restructure Petrochemical Sector

The South Korean government is set to present a restructuring plan for the nation's ailing petrochemical sector later this month, which is currently facing significant challenges. This announcement was made by Industry Minister Kim Jung-kwan on Thursday. During his visit to a shipyard, Kim stressed the necessity for the petrochemical industry to undertake voluntary actions, such as optimizing their facilities. This statement, as covered by Reuters, underscores the urgency of the situation. Kim drew parallels between the current predicament of South Korea's petrochemical companies and the restructuring of the shipbuilding industry in the late 2010s. At that time, shipbuilders had to liquidate assets and streamline operations amid a severe downturn in orders. The profit margins of petrochemical companies in South Korea, as well as globally, have sharply declined. This is attributed to an oversupply of oil-based products resulting from continuous capacity expansions over the last decade, predominantly in China, which is the largest petrochemical market in the world. During the same period, demand has remained stagnant for three to four years.