According to industry sources on July 5, four major petrochemical companies—LG Chem, SK Geocentric, Hanwha Solutions, and Hanwha Total Energies—have temporarily lowered the prices of key products supplied to small domestic customers.
LG Chem has reduced the supply price of basic petrochemical products, such as ethylene and propylene, by 100,000 to 200,000 won per ton for small business customers. This price adjustment, which took effect from shipments in May, was determined based on the proportion of naphtha used in the products and their prices, focusing on customers manufacturing essential materials like vinyl and packaging.
SK Geocentric has cut the prices of major polymer products, including polyethylene (PE) and polypropylene (PP), by up to 200,000 won per ton for small demand enterprises. The reduced prices will apply to shipments starting in June. This action aims to alleviate the cost burden on small manufacturers facing rising raw material prices and domestic and international uncertainties.
Hanwha Solutions has lowered the selling prices of key petrochemical products, including PE and polyvinyl chloride (PVC), by 100,000 to 250,000 won per ton. The company intends to share the cost reduction benefits from the government's naphtha and basic petrochemical support with its customers, thereby reducing the cost burden on plastics processing companies. Among the four companies, Hanwha Solutions has the largest price reduction based on maximum cuts.
Hanwha Total Energies has also reduced the prices of PE and PP products supplied to domestic plastics processing customers by up to 200,000 won per ton. This temporary price reduction will apply to shipments starting in June. Given that PE and PP are widely used in food packaging, industrial films, consumer goods, and medical supplies, the price cuts are expected to ease the cost burden for small processing companies.
These price reductions align with the government's naphtha supply stabilization policy. The government has decided to support 50% of the price increase compared to pre-war levels for contract volumes from April to June this year to reduce the purchasing burden on petrochemical companies. The petrochemical firms are passing some of the reduced raw material purchasing costs onto their customers through these price cuts as part of a cooperative effort.
However, the petrochemical industry is also facing profitability pressures due to oversupply from China and sluggish global demand, making it unlikely that the price reductions will be sustained in the long term. Observers suggest that since this measure is a temporary cooperative solution linked to government support, the extent and duration of future assistance may vary depending on raw material price trends and demand recovery.
* This article has been translated by AI.
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