The Ministry of Trade, Industry and Energy and the Petrochemical Industrial Community co-hosted a New Year ceremony and a brief gathering for CEOs on Jan. 9.
In his New Year’s address at the ceremony, Minister Yoon Sang-jick said the government will do all it can to help the petrochemical industry overcome problems so it comes out ahead this year, just like it did last year.
The industry suffered from the erosion of its domestic market due to the lack of consumption and slowdown in its output, prolonged sluggish demand for synthetic fiber raw materials, and weak demand from China, the largest market for petrochemical raw materials in the world. This was due mostly to the expansion in the production of the petrochemical products to boost its self-sufficiency ratio in China.
The industry was still able to export $48.3 billion worth of petrochemical products, the same as the previous year, despite the difficulties with a surplus of $31.8 billion — a surprising result. Minister Yoon wanted the industry to speed up its moves to export petrochemical products this year, too, promising government support where needed.
The government will legislate a new law tentatively titled “the Special Law to Support the Industry’s Reform” to speed up the reform of the petrochemical industry this year. The government will also help the construction of a joint sales network and an integrated management system to take care of excess energy, and by products exchanges designed to upgrade safety in petrochemical industrial complexes around the country.
The government will also help the industry lower the purchase price of naptha, a key raw material for petrochemical products, by importing low-price condensate and replacing it with naptha.
During a meeting of the CEOs of the petrochemical companies during the New Year’s ceremony, the Ministry of Trade, Industry and Energy urged industry to invest in high value-added manufacturing facilities and speed up the reform of the industrial structure. The ministry also wanted the industry to make more efforts to cut the prices of its products and boost the efficiency in the production of the products. The CEOs included Vice Chairman Bang Sang-hong of Hanwha Chemical, Chairman Park Sam-koo of Kumho Chemical, president Kim Chang-beom of Hanwha Chemical and President Cha Hwa-youp of SK Global Chemical, among others.
The ministry also wanted the industry to double its cooperation with SMEs in the spirit of mutual survival. The ministry urged the cooperation and fusion of the auto parts industry by developing plastic materials for transport aircrafts and boosting the production of a parts industry .
The CEOs of petrochemical manufacturing firms and the Ministry of Trade, Industry and Energy agreed that the fall in the price of oil would cut the price of naptha — the industry’s major raw material — which will boost those companies competitiveness by reducing production costs. They also projected that global demand for petrochemical products would continue to expand this year.
The projection for the rise in global demand for petrochemical products by region:
Overall: 4.6 percent; North America 3 percent; West Europe: 1.8 percent; Northeast Asia: 6.5 percent; and China 10.7 percent.
At the same time, domestic demand for petrochemical products is projected to rise by a small margin this year to expand exports by a small margin compared to last year.
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