South Korea’s KPIC to cut operating rates at Onsan cracker on negative margins

It is reported that Korea Petrochemical Industry Co (KPIC) is planning to reduce operating rates at its naphtha cracker in Onsan, South Korea by at least 15% by end of January 2022 due to negative profit margins.

The cracker has an annual output of 800,000 tons/year of ethylene and 410,000 tons/year of propylene would be operating at reduced rates throughout February. 

KPIC is not the only South Korean producer that announced operating rate cuts due to negative margins. Earlier this week, LG Chem decided to lower run rates at three of its steam crackers to 80% throughout January.

There have been market talks that Lotte Chemical is mulling over a similar move, however, there is no official announcement from the producer at the time of this report.