South Korea’s petrochemical rescue faces a reckoning over who pays the bill



Analysis South Korea’s petrochemical rescue faces a reckoning over who pays the bill Creditors are extending repayment deadlines as new production in Ulsan tests the value of planned factory closures John LeeOctober 26, 2026 SHARE COPY LINK FACEBOOK X LINKEDIN MASTODON HD Hyundai Chemical's petrochemical factory \| Image: HD Hyundai South Korea’s petrochemical restructuring is entering a decisive phase as a first major merger takes effect, testing whether shareholders and banks can shoulder the industry’s losses while new production complicates efforts to reduce excess capacity. The September launch of H&L Advanced, combining Lotte Chemical’s Daesan operations with HD Hyundai Chemical, followed Seoul’s approval of a second agreement in Yeosu in July. Together, the deals aim to remove 2.49 million metric tons of annual ethylene production capacity. Ethylene is a basic ingredient in plastics and other chemicals. But S-Oil’s Shaheen projectin Ulsan is expected to add 1.8 million metric © Korea Risk Group. All rights reserved. No part of this content may be reproduced, distributed, or used for commercial purposes without prior written permission from Korea Risk Group. LATEST ANALYSIS 01South Korean officials can’t agree on why US curbed intel sharing 02South Korea’s prosecution reform reshapes how crimes reach the courtroom 03South Korea’s US$744 billion climate change plan faces first financial test 04SK Hynix’s China plans pose test for US semiconductor investment goals 05South Korea to legalize abortion pills despite unresolved gaps in the law 06South Korea’s rate hike risks hitting indebted households hardest 07South Korea’s won faces a new test as foreign bond buying loses momentum 08Trump’s Russian diesel deal may leave South Korea’s refining boom intact

Analysis

South Korea’s petrochemical rescue faces a reckoning over who pays the bill

Creditors are extending repayment deadlines as new production in Ulsan tests the value of planned factory closures

John LeeOctober 26, 2026

South Korea’s petrochemical rescue faces a reckoning over who pays the bill

HD Hyundai Chemical's petrochemical factory | Image: HD Hyundai

South Korea’s petrochemical restructuring is entering a decisive phase as a first major merger takes effect, testing whether shareholders and banks can shoulder the industry’s losses while new production complicates efforts to reduce excess capacity.

The September launch of H&L Advanced, combining Lotte Chemical’s Daesan operations with HD Hyundai Chemical, followed Seoul’s approval of a second agreement in Yeosu in July. Together, the deals aim to remove 2.49 million metric tons of annual ethylene production capacity. Ethylene is a basic ingredient in plastics and other chemicals.

But S-Oil’s Shaheen projectin Ulsan is expected to add 1.8 million metric

LATEST ANALYSIS

01South Korean officials can’t agree on why US curbed intel sharing
02South Korea’s prosecution reform reshapes how crimes reach the courtroom
03South Korea’s US$744 billion climate change plan faces first financial test
04SK Hynix’s China plans pose test for US semiconductor investment goals
05South Korea to legalize abortion pills despite unresolved gaps in the law
06South Korea’s rate hike risks hitting indebted households hardest
07South Korea’s won faces a new test as foreign bond buying loses momentum
08Trump’s Russian diesel deal may leave South Korea’s refining boom intact

South Korea’s petrochemical rescue faces a reckoning over who pays the bill

LATEST ANALYSIS

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John Lee