December 9, 2024 – In a recent announcement, Lotte Chemical Corporation of South Korea has revealed that due to ongoing financial difficulties and a challenging market environment, it will indefinitely suspend operations at some of its petrochemical complex facilities in Yeosu. This shutdown will affect the second plant, including production lines for PET, ethylene glycol (EG), and ethylene oxide derivatives (EOA). This move marks another significant strategy by Lotte Chemical to reduce the risk of losses amidst intense global competition.
It is reported that Lotte Chemical’s 400,000-ton/year ethylene glycol plant and 230,000-ton/year ethylene oxide derivatives plant ceased operations on December 3, 2024. According to Color Masterbatch Industry News, the company has been grappling with oversupply and price wars in recent years, particularly facing strong competition from Chinese petrochemical enterprises. Earlier this year, Lotte Chemical decided to indefinitely shut down a total of 520,000-ton/year PET facilities in Yeosu and Ulsan, with no news of restart so far.
Lotte Chemical’s financial situation is alarming, with an operating loss of 413.6 billion Korean won in the third quarter of 2024 alone, and a cumulative operating loss of 660 billion Korean won for the entire year. To address this predicament, the company has implemented a series of cost-cutting measures at its Yeosu and Daesan plants. Regarding the future plans for the second plant, whether it will be restarted or considered for sale, Lotte Chemical has not disclosed any specific details. However, the transfer of approximately 70 employees from the plant suggests that the shutdown may be prolonged.
Currently, other facilities at Lotte Chemical’s Yeosu site, such as the 1.23 million-ton/year naphtha cracking plant, the 600,000-ton/year polypropylene (PP) plant, and the 630,000-ton/year high-density polyethylene (HDPE) plant, remain operational. However, the specific operating status of these facilities has not been disclosed, sparking speculation and concern in the industry about the potential broader impact of Lotte Chemical’s restructuring plans.