APIC ’24: S Korea petrochemical output, exports to grow at low single digits

SINGAPORE/SEOUL (ICIS)–South Korea’s petrochemical production is projected to grow at 2.2% this year, with exports rising by an average of 2.8%, faster than domestic demand’s 1.3% increase, industry data showed.

“However, this is mainly due to the base effect of a significant decrease in production from the previous year,” the Korea Petrochemical Industry Association (KPIA) said in a report prepared for the Asia Petrochemical Industry Conference (APIC) being held in Seoul on 30-31 May.

“The supply and demand situation is expected to improve this year as global supply declines, but it will take a long time to resolve due to the large accumulated capacity expansion,” it said.

Full-year petrochemical production is expected to grow to 22.1 million tonnes, “largely due to the base effect of large-scale regular maintenance in the previous year”, KPIA said.

In 2023, production declined by 2.1% to 21.7 million tonnes.

“Production is also expected to increase y-o-y due to the restart of facilities that were shut down due to the deteriorating market conditions and an increase in the utilization rate of companies in anticipation of an improvement in the market,” it added.

The country’s petrochemical export volumes are projected to reach 12.8m tonnes in 2024, with growth slowing from the 3.1% pace posted last year.

South Korea is heavily dependent on exports, with their share to total production at around 58% in 2023, based on three major sectors, namely synthetic resin, synthetic fiber and synthetic rubber.

S Korea 2024 Petrochemical Industry Forecasts (in ‘000 tonnes)

Products	Production	Exports	Exports share to total output (%)	2023 actual export growth (%)	2024 projected export growth (%)
Synthetic resins	15,641	9,787	62.6	-0.4	3.0
Synthetic fibre raw materials	5,846	2,604	44.5	21.0	1.5
Synthetic rubber	655	429	65.5	-6.8	7.0

Source: KPIA

“Korea’s domestic market is stagnant, so most of the increased production will be exported,” the KPIA said.

Domestic petrochemical consumption this year is projected to post a minimal increase to 10.4m tonnes, following a 6.3% contraction in 2023.

A sizeable chunk of South Korea’s petrochemical exports goes to China, whose own demand has been slowing down amid an economic slowdown.

Focus article by Pearl Bantillo

Additional reporting by Nurluqman Suratman