MOSCOW (MRC) -- LG Chem , South Korea’s largest chemical company, sees the global petrochemical market being stable this year, and is diversifying its products to guard against falling plastic usage, reported Reuters with reference to the company’s chief executive.
Asian petrochemical makers typically use crude-oil derived naphtha as a feedstock to produce ethylene and other basic petrochemicals, which are mostly used to make plastics. "The petrochemical business is largely affected by oil prices, but now oil prices are stable in the range of $60 per barrel after rising for a while," Park Jin-soo, LG Chem CEO and vice president, said at a press conference on Friday which was embargoed until Sunday.
"The market may not be as robust as last year but I think it won’t go bad this year."
The chief executive also raised concerns over protectionism after U.S. President Donald Trump proposed tariffs on steel and aluminum, prompting warnings of retaliation from U.S. trading partners.
"We see relatively little impact because our export volume to the U.S. is not that much, however, in the long term we should be prepared for global trade protectionism," Park said.
Asked about the potential impact of plastic usage bans on the petrochemical industry, Park said demand continued to increase steadily.
"However we have been diversifying our businesses to maintain steady demand regardless of supply or demand changes," he said.
LG Chem currently operates two naphtha crackers in the southwestern cities of Yeosu and Daesan with a combined 2.2 million tonnes per year (tpy) of ethylene output. It would increase the Daesan plant’s ethylene output capacity by 230,000 tonnes to 1.27 million tpy by 2019.
The company said in December it would expand its acrylic and superabsorbent polymer production capacity by the first half of 2019 in a bid to focus on more lucrative petrochemical products.
Apart from the petrochemical business, LG Chem is also one of the major South Korean battery makers, along with Samsung SDI and SK Innovation.
As MRC wrote earlier, in January 2016, South Korea's LG Chem said it had decided to drop a plan to jointly build a USD4.2-billion petrochemical complex in Kazakhstan, citing a prolonged slump in oil prices and a sharp increase in facility investments. In 2011, the chemical company said it would construct the complex near the western Kazakh city of Atyrau as part of a 50-50 joint venture with two Kazakh companies. The plan involved building ethylene and polyethylene plants with annual capacities of 840,000 tonnes and 800,000 tonnes, respectively.
LG Chem Ltd., often referred to as LG Chemical, is the largest Korean chemical company and is headquartered in Seoul, South Korea. According to ICIS report, it is 15th biggest chemical company in the world in 2011. It has eight domestic factories and global network of 29 business locations in 15 countries. LG Chem is a manufacturer, supplier, and exporter of petrochemical goods, IT&E Materials and Energy Solutions.
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