Korean Media: Middle Eastern Naphtha Supply Difficulties Lead to Partial Shutdown of LG Chem Plants

¬ Continuous shutdowns at Yeosu Petrochemical Complex disrupt plastic and tire production... Airlines worry about overseas refueling challenges

On the 23rd, LG Chem's No. 2 plant in Jeonnam Yeosu—South Korea’s largest petrochemical enterprise—was forced to shut down its naphtha cracking unit (NCC), due to a disruption in imports of Middle Eastern naphtha. Industry concerns warn: "Following this trend, major domestic petrochemical plants will inevitably be forced to shut down one after another."

LG Chem operates both Plant 1 and Plant 2 in Yeosu; the shutdown affects Plant 2, with an annual capacity of 800,000 tons. The company stated: "To ensure the long-term operation of our primary facility (Plant 1), we made this decision by prioritizing the use of our limited naphtha inventory." If Plant 1—which has a capacity of 1.2 million tons—were to shut down, the downstream impact would be significantly greater; thus, only Plant 2 was closed.

Naphtha is a colorless liquid produced during crude oil refining. After being cracked at temperatures above 800°C, it yields fundamental petrochemical raw materials such as ethylene, propylene, and benzene. These raw materials are processed into a wide range of industrial materials—including plastic bags, PET bottles, packaging materials, synthetic fibers, synthetic rubber, tires, separator films for secondary batteries, conductive materials, and more.

The impact of disrupted Middle Eastern naphtha supply continues to spread across South Korea’s largest petrochemical hub—Yeosu. In early March, Yeochun’s NCC had already notified customers of “force majeure” (supply interruption), and some processes were halted as early as the 17th. Lotte Chemical preemptively conducted a major maintenance shutdown starting from the 27th. Reports indicate that restarting petrochemical facilities once shut down incurs extremely high costs. Therefore, industry players began reducing operating rates from the start of the month in an effort to maintain operations. However, with the conflict lasting over 20 days, shutdowns have become unavoidable.

Meanwhile, the supply shock from the Middle East is spreading through Asia’s aviation sector. With many major Asian countries facing tight crude oil supplies, airlines based in South Korea are increasingly concerned about difficulties refueling when returning from airports in Japan, Vietnam, the Philippines, and other destinations. Observers warn that if local aviation fuel prices surge dramatically, flight suspensions on certain routes may occur.

Source: Chosun Ilbo

Original article: toutiao.com/article/1860511941365763/

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