South Korean authorities approved a major restructuring plan on July 22: YNCC’s two Yeosu ethylene units (1.39Mt/year) will close permanently. The shutdown cuts YNCC’s ethylene capacity by over 60%, trimming nearly 10% of South Korea’s total national ethylene capacity at one stroke.
Nearly all major South Korean petrochemical firms have suffered losses in the past two years. Their plants depend heavily on imported naphtha and lack cost advantages.
The government targets voluntary ethylene capacity cuts of 2.7–3.7Mt/year, around 25% of its total 14.7Mt annual capacity. The target gap remains; aging crackers at KPIC and SK Geocentric are next candidates for shutdown.
Domestically, only 1Mt new PE capacity went online in H1, far lower than last year. Middle East shipping disruptions and concentrated domestic plant maintenance eased supply-demand tensions.
H2 will see a huge 5Mt new PE capacity launch in China: Tarim Phase II FDPE enters trial run for July–August startup; Shandong New Times LLDPE is fully built and ready for production. Huajin Aramco, Baofeng Phase IV, China Coal Yulin will launch in Q4.
Surging geopolitical risks lifted crude oil for four straight days, offering cost support for PE. Yet downstream enters traditional low season with weak end-user restocking, forming a “strong cost, weak demand” tug-of-war.
Global crude kept climbing, pushing all domestic chemical futures higher today: Crude +4.14% (top gainer), styrene monomer +2.88%, plastics +2.15%, benzene +1.96%, PX & PP +1.86%, propylene +1.7%, plastic varieties +0.64%. Polyester chips, staple fiber and PTA also rose to varying degrees.
Post time: Jul-24-2026