Strike may hit S Korea’s polyolefins exports

12 June 2008 08:00  [Source: ICIS news]

By Chow Bee Lin

SINGAPORE (ICIS news)--South Korea’s polyolefins exports will be hit if the nationwide truck drivers’ strike is not resolved soon, local polyolefins producers said on Thursday.

Some polyolefins producers had tried to minimise the impact by arranging with non-union transport companies to continue delivering their cargoes, but these plans may be thwarted, an Ulsan-based producer and a Daesan-based producer said.

"The unions may block the roads leading to the ports so even if non-union truck companies are willing to work, they still cannot deliver our containers to the ports," the Ulsan-based producer said.

Some polyolefins producers had delivered their cargoes to the container yards at the ports over the past weeks in anticipation of the strike, but their exports would be affected if the strike drags on, two Yeosu-based producers said.

"The cargoes we have at the container yard will be shipped out in one week’s time, so we’ll have nothing to export if the strike drags on beyond one week," one of the Yeosu-based producers said.

Container deliveries to the Ulsan port were less affected than those to other ports during earlier strikes, and hence some producers said they hoped it would be the same this time.

"Our exports to China are loaded at the Ulsan port and we export to other markets such as the Middle East and South America from Pusan, so we hope the strike will have less impact on our exports to China," an Ulsan-based polyolefins producer said.

The unions had in the past, targeted transportation to Pusan port as it is one of the country’s oldest ports and hence more symbolic, the producer added.

An international polypropylene (PP) supplier said it believed most of the PP producers in South Korea were carrying low inventories, and hence were unlikely to reduce production rate due to the transport strike.

"Most of the PP producers have around two weeks of inventories now which is manageable, but they’ll probably have to start reducing production if their inventories rise to four weeks of production due to the strike," the PP supplier said.

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By: Chow Bee Lin
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