South Korea Plastic Industry Association Urges Companies to Propose Solutions to Soaring Raw Material Costs

Institutional statistics show that the global polyethylene capacity growth is expected to be more than twice the demand growth. Until 2030, polyethylene demand growth is about 3.3 million tons per year, while the average capacity growth is 6.7 million tons per year. The growth in 2026 and 2027 may be particularly strong. Of the 34 million tons per year of reserve capacity by 2030, about 85% is under construction, mainly large steam cracking units supported by major oil and chemical companies. This surge in supply will drive a restructuring of the global polyethylene market. New, lower-cost large facilities will replace less competitive older assets. Starting from 2026, the pace of capacity closures in Europe and developed East Asia (including Japan and South Korea) will accelerate.

Global energy and chemical market information provider ICIS recently reported that, due to tensions in the Middle East, the Korea Federation of Plastic Industry Cooperatives (KFPIC) has called on its member companies to propose contingency plans to stabilize the continuously rising costs of raw materials. The federation comprises large, medium, and small enterprises engaged in synthetic resin processing and plastic product manufacturing in Korea, including members such as LG Chem and Lotte Chemical.

China Chemical responded to investor inquiries on the interactive platform, stating that the company's aerogel and phase change material production businesses are developing well and are currently in normal shipment. The production of ultra-high molecular weight polyethylene is not yet in operation. Its subsidiary, Hualu Company, possesses full-process technology and engineering capabilities for producing high-purity silicon (polysilicon) materials, making it the most technically comprehensive engineering company in this field with the highest market share in China. It is known as the "hidden champion" of the photovoltaic industry. The company supports the localization of upstream materials through its engineering capabilities, but has not yet engaged in the production of high-purity silicon (polysilicon).

According to Securities Star, on April 7, YINXI Technology (300221) responded to investor inquiries on the investor relations platform. Investor’s Question: Hello, Secretary of the Board. Has your company expanded the production capacity of PPO? Yinji Technology’s reply: Dear investor, thank you for your attention to our company. The company’s PPO project renovation plan has currently been initiated; however, its production capacity is relatively small. In the future, the company may consider expansion based on market demand for this product and the company’s actual circumstances.

“Affected by current international geopolitical events, international energy prices have experienced significant volatility, and expectations for price increases of related domestic products have intensified,” said Gao Shigang, Executive Director, Deputy Party Secretary, and President of China Coal Energy (601898), at the company’s earnings briefing. He stated that the company’s overall performance is expected to remain stable. He further projected that China’s coal market supply-demand balance may shift toward a tight equilibrium by 2026; the long-term contract mechanism for power coal supply security will continue to serve as a “ballast,” and spot coal prices are likely to trend upward overall, albeit with heightened range-based volatility.