MEDIA: China's petrochemical boom challenges Asian rivals
Reports showed from 2019 to 2023, China added 25 new ethylene crackers compared to just three in South Korea.
China's vigorous expansion in the petrochemicals industry poses significant challenges to Asian rivals especially to the South Korean producers, once dominant in Asia's market for chemical exports. Historically, companies like LG Chem Ltd and Lotte Chemical Corp thrived on supplying the region, but oversupply issues driven by China's rapid plant construction have prompted downsizing and strategic shifts.
South Korean giants like LG Chem have been compelled to shut down units due to prolonged oversupply, while others, such as Lotte Chemical, are exploring strategic alternatives for subsidiaries. This predicament stems from China's substantial investment surge in petrochemicals, with the nation poised to dominate global capacity expansions.
Reports showed from 2019 to 2023, China added 25 new ethylene crackers compared to just three in South Korea.
Faced with declining export shares to China and fierce competition, South Korean firms are diversifying into renewable energy sectors like solar and battery production. Additionally, industry experts anticipate further restructuring and consolidation, with some firms considering exits or partnerships with Middle Eastern feedstock producers.