South Korea’s petrochemical industry is reeling under the weight of China’s oversupply, with major companies slashing output and trimming jobs as market pressures intensify. According to local media, plant utilization rates, crucial for profitability, have tumbled well below the 80% threshold, with some facilities running in the 60% range during the first half of 2025.
LOTTE Chemical’s naphtha cracking center operated at just 64.4% capacity, a steep fall from 81% a year earlier, while its polypropylene and polyethylene facilities also saw significant declines. LG Chem reported an overall operating rate of 71.8%, down from 78%, with specialty materials output plunging from 65.9% to 49%. Hanwha Solutions likewise struggled, with lower utilization particularly in automotive and solar-related processed materials.
The downturn has translated into job losses, with LOTTE Chemical, LG Chem, and Hanwha Solutions shedding a combined 512 employees since the end of last year. Industry observers warn that prolonged weakness could deepen the restructuring wave now sweeping through the sector.
In response, the government is preparing intervention measures. The Ministry of Trade, Industry and Energy is expected to announce a restructuring plan by the end of August, following recent high-level talks among economic policymakers.
