Korean terephthalic acid (TPA) producers are in doubt of the practical effects of the Korean government’s plan for industry-wide restructuring. The government mentioned the necessity of a voluntary reorganization of the sector again at its meeting held on Nov. 15.
These days, Chinese TPA producers are raising their self-sufficiency rate at a fast pace in order to meet a rapid increase in TPA demand in their country, which has significantly affected Korean firms’ exports. Six Korean companies – Hanwha Chemical, Samnam Petrochemical, Taekwang Industrial, Lotte Chemical, SK Petrochemical and Hyosung – are currently running TPA production facilities, and their combined annual capacity is approximately 6.34 million tons. SK Petrochemical stopped its production in July and the total production volume is on the decline nowadays.
Their total export volume is decreasing due to a fall in exports to China. Specifically, the amount reached 3.65 million tons in 2011, but dropped to 2.67 million tons last year. The amount totaled 1.82 million tons during the first three quarters of this year.
“The restructuring is no simple matter because different companies have different situations,” an industry insider remarked, adding, “For instance, Lotte Chemical and Hyosung produce TPA for their own use and thus have little to do with the current supply glut.”