Plastic garbage bags are displayed at a supermarket in Seoul, Tuesday. Yonhap
The government plans to begin restricting naphtha exports by oil refiners this week. The emergency measure is in response to a shortage of the key petrochemical feedstock, which was designated last week as critical to economic security.
Firms hoarding naphtha will also face severe penalties, including the cancellation of their business registrations.
“For essential facilities to stay operational, the government will order adjustments to the overall naphtha supply if the situation worsens,” Yang Ghi-wuk, deputy minister for industry, trade and resource security, said Tuesday during a daily briefing on the Middle East crisis.
The plan comes amid rising concerns about potential setbacks in the production of petrochemical-based goods due to the war in Iran, which has disrupted naphtha shipments through the Strait of Hormuz. Before the conflict, more than half of Korea’s naphtha imports passed through the strait.
President Lee Jae Myung addressed the issue during a Cabinet meeting the same day.
“Petrochemical products are used in everything from food delivery containers to medical equipment, making it difficult to predict when and where disruptions might occur,” he said.
“This poses a serious threat to people’s daily lives, and the government must proactively activate an emergency response system at the national level.”
LG Chem's factory in Yeosu, South Jeolla Province / Courtesy of LG Chem
Global naphtha prices have nearly doubled from prewar levels, surpassing $1,000 per ton and prompting LG Chem, Yeochun NCC and Lotte Chemical to suspend parts of their naphtha cracking centers, which produce ethylene, a raw material for plastics, synthetic fibers and synthetic rubber.
Source: Korea Times News
