Original Source
Middle East Crisis Fuels Naphtha Supply Fears, Puts Korean Petrochemical Industry on Production Alert
Production Disruptions Due to Naphtha Supply Instability
The nation's largest ethylene producer, located in Yeosu National Industrial Complex, is struggling with naphtha supply and demand in the aftermath of the war. Naphtha, a liquid fuel obtained by distilling crude oil, is known as the 'rice of petrochemicals,' used in the production of various products such as plastics and textiles through processing. While factories are currently operating on reserves, further supply is proving difficult due to the ongoing impact of the conflict.
Strait of Hormuz Blockade and Industry Response
Over half of imported naphtha and 70% of imported crude oil enter Korea via the Strait of Hormuz. With the strait effectively blocked, naphtha supply has come to a standstill. Consequently, Yeochun NCC recently notified its customers of product supply delays or adjustments, declaring 'force majeure' – the first among petrochemical companies to do so. With naphtha reserves lasting only about three weeks, the company is operating at its lowest utilization rate by reducing ethylene production to avoid shutting down factory facilities.
Widespread Crisis in the Petrochemical Industry
Other petrochemical companies equipped with ethylene production facilities have also informed their customers about potential force majeure events and have lowered their factory utilization rates to 60-70%. For now, they are securing some supplies through existing reserves and exploring alternative sources such as the United Arab Emirates. However, if the Middle East crisis prolongs, a significant blow to the entire domestic petrochemical industry is anticipated.
*Source: YouTube: YTN (2026-03-13)*
