Lotte Chemical has led restructuring of South Koreau2019s petrochemical sector, cutting capacity at uncompetitive facilities after recording an operating loss of 943.6 billion won last year. The government targets reducing naphtha cracking center capacity by 2.7-3.7 million tons. Capacity cuts discussed at Daesan and Yeosu total about 2.5 million tons. A free-rider debate has emerged: companies that cut first give up sales and market share and bear restructuring costs, while competitors that keep plants running share the benefits of improved supply-demand and pricing. The dilemma is sharper for integrated refiners such as GS Caltex.
Source: Chemical Week
