South Korea Prepares Major Restructuring of Petrochemical Industry Amid Global Oversupply
South Korea plans to announce a restructuring of its petrochemical sector, facing oversupply challenges and decreased margins. Industry Minister Kim urges companies to learn from past shipbuilding restructuring. Factors include global oversupply and sluggish demand. Analyst Hwang suggests large-scale restructuring, noting potential financial woes for firms like Yeochun NCC Co.
South Korean government is set to reveal a significant restructuring plan for its petrochemical sector, addressing a dire oversupply and plunging margins, as Industry Minister Kim Jung-kwan announced on Thursday.
Amidst challenges similar to those faced by the shipbuilding industry in the late 2010s, where companies liquidated assets due to dwindling orders, South Korean petrochemical firms are urged to take preemptive steps like facility adjustments to counter the downturn, influenced largely by China's capacity expansion.
Amid mounting concerns for companies like Yeochun NCC Co, which faces significant loan repayments, the government sees a restructuring as crucial, especially as global market recovery isn't expected until 2027. The plan may involve policy measures, including tax incentives for mergers and relaxed antitrust regulations.
(With inputs from agencies.)
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