LG Chem plans to shut down its Daesan high-density polyethylene (HDPE) plant in South Korea
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According to a customer letter seen by Platts, a unit of S&P Global Commodity Insights, on October 14, LG Chem Ltd. announced plans to shut down its high-density polyethylene (HDPE) plant in Daehan, South Korea. Although the company said that more details on the timeline are still to be determined, this announcement came following continued weak trading activity in Far East Asia. ““South Korea’s petrochemical industry is currently facing severe profitability challenges, leading to structural adjustments and a reallocation of business activities across the entire industry,” the company said. Currently, South Korean chemical companies are facing dual pressures: the impact of increased production capacity resulting from large-scale petrochemical projects in China, and a weak global macroeconomic environment, which has led to persistently sluggish downstream demand in sectors such as construction, packaging, and automotive. Against this backdrop, South Korean giants such as Lotte Chemical and Hanwha Total are reducing their operations to get through the tough times by selling assets and idle production facilities. LG Chem’s decision to shut down its operations demonstrates its commitment to strategic transformation. By phasing out uncompetitive traditional production capacities, the company is focusing its resources on high-growth areas such as battery materials, environmental solutions, and innovative drugs. This desperate effort to survive reflects a fundamental shift in the competitive dynamics of the global chemical industry: from expansion in scale to innovation in technology and upgrading of the value chain. The strategic adjustments by South Korean chemical giants could reshape the future landscape of the global chemical industry.
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