Lotte Chemical suffered a major setback due to the spread of the COVID-19 pandemic and a fire-gutted Daesan plant last year. Entering the first quarter of this year, the chemical company has shown signs of a brisk recovery in its business performance.

Thanks to the resumption of the Daesan plant in Seosan, Chungcheongnam-do, and rising demand in value-added products, Lotte Chemical is predicted to see its operating profit during the first quarter of the year surpass that of the whole of last year.

Daesan naphtha cracking center (NCC), which resumed its operation last Dec. 30, is now in full operation to produce raw materials. The plant has facilities for cracking naphtha at a high temperature in excess of 800 degrees Celsius to produce petrochemical feedstocks like ethylene, a raw material for plastic production.

Daesan NCC is Lotte Chemical’s key facility to produce 1.1 million tons of ethylene annually and post 3.3 trillion won in annual sales. The plant now contributes to some 20 percent of the chemical company’s total sales.

Rising demand for ethylene in time for the resumption of the operation of Lotte Chemical’s NCC plant is a good omen for the chemical company to see the recovery of its business performance.

It is why an unusual cold spell that hit the United States early this year that forced U.S. chemical plants, including Exxon Mobil’s, to shut down, thus causing an imbalance in supply and demand.

Japan’s petrochemical plant, forced to close due to an earthquake, also played a part. Business sources said ethylene prices, which stood at $900 late last year, surged to $1,199 so far this year. Prices for plastic, made with ethylene, have also jumped two- to five-fold.

Lotte Chemical saw the basic material business decline in operating profit last year due to an accident at Daesan plant, but the business managed to avoid a big loss on the back of a good defense of the advanced material business. The advanced material business continues to be on a roll this year.

Propylene sales for medical applications, developed by Lotte Chemical, stood at 10,399 tons in the January-March period, approaching 11,386 tons sold for the whole of last year.

PP sales for 2020 represented a more than three-fold jump over the previous year, and if the trend continues, PP sales are forecast to jump this year over four times more than last year.

The surge in PP sales is owed to a jump in demand for syringes, caused by the COVID-19 pandemic. Highly transparent medical plastic, made with PP, is used for COVID-18 diagnosis kits, research kits, and other medical application areas required to verify content amounts only with eyes.

A majority of chemical companies produce high transparent plastics, but Lotte Chemical is the sole chemical company to produce transparent medical plastic.

Lotte Chemical is expanding the development of special PP materials to meet rising demand involving health and safety of late.

As an increasing number of people stay longer at home due to the pandemic, chemical companies see a steady demand for acrylonitrile butadiene styrene copolymer (ABS) and polycarbonate (PC) on the back of a rising demand for home appliances.

The Southeast Asian chemical market is showing signs of recovery in the wake of introducing vaccines against the pandemic. LC Titan, a subsidiary of Lotte Chemical Malaysia, is predicted to see its 2021 Q1 operating profit stand at some 100 billion won.

LC USA, a U.S. plant of Lotte Chemical, is expected to lose an estimated 20 billion won due to a stoppage in its operation, caused by unusual cold spell early this year. But the plant saw prices of mono ethylene glycol (EMG), a raw material for producing plastic, recover and post an operating profit.

The financial information company FnGuide predicted that Lotte Chemical will log an estimated 480 billion won in operating profit for the first quarter of this year, topping 356.9 billion won the chemical company posted for the whole of last year.

Lotte Chemical, on the back of a recovery in its business performance, announced a vision “Green Promise 2030,” to focus on ESG management early this year.

Lotte Chemical announced a plan to build a new waste plastic recycling plant with a capacity of 110,000 tons annually at Ulsan’s second plant by investing about 100 billion won by 2024.