LG Chem schedules Yeosu naphtha cracker restart after six-month outage

LG Chem scheduled the restart of its second naphtha cracking centre in Yeosu for 12 October after an outage lasting more than six months, according to Cracker Feedstocks wire (Bing News). The company disclosed the timetable in a regulatory filing on 8 October. The report lists the unit’s annual capacity at 900,000 tonnes and says it had been shut since 23 March.

The cracker accounts for annual sales of 2.49 trillion won, equivalent to 5.09% of group revenue, the report said. LG Chem said it would restore production quickly once raw material supplies stabilised, seeking to limit the effect on output and sales. The filing describes a scheduled restart rather than confirming that operations have resumed.

According to the wire, disruption to naphtha supplies arising from conflict between the US and Iran prompted the shutdown. It separately reports annual production of approximately 800,000 tonnes of ethylene and 400,000 tonnes of propylene at the unit. Those materials feed downstream polymerisation plants producing polyethylene and polypropylene. The prolonged outage disrupted upstream supplies, with effects extending to plastics, films and packaging production, the report said.

The restart plan comes against a weak industry outlook. An ICIS assessment dated 9 October, cited by the wire, said the global petrochemical downturn would continue to put pressure on LG Chem through 2027. Excess capacity and weaker profitability were among the constraints identified, while stronger battery business performance was seen as providing only a partial offset.

Nomura Securities forecast on 8 October that global ethylene capacity would rise from 243.9 million tonnes a year in 2026 to 251.3 million tonnes in 2027, outstripping demand growth. It expected operating rates to remain around 81%, with China leading additions and further expansion in North America and the Middle East.

Nomura analysts Cindy Park and Dongmin Lee also cited higher naphtha and maritime transport costs, won appreciation and persistent chemical oversupply as earnings pressures. They projected petrochemical operating losses of 150 billion won in the third quarter and 179 billion won in the fourth quarter of 2026, following profits of 165 billion won and 427 billion won in the first and second quarters respectively.