S Korea truck strike delays China polymer imports

18 June 2008 12:05  [Source: ICIS news]

SHANGHAI (ICIS news)--China’s polymer imports from South Korea will be delayed by up to three weeks due to a truck drivers' strike in Busan which began early last week, a source said on Wednesday.

 

Busan port, one of the busiest in South Korea, had been plunged into paralysis by the strike and major polymer producers such as SK Energy, LG and Honam Petrochemical would be forced to defer their June cargoes to China, he said.

 

Hanwha Petrochemical, another major South Korean producer, had not been able to export its cargoes since the stoppage, leaving thousands of tonnes of cargoes at the port, a China-based importer said.

 

As a major import source for China, South Korea normally ships about 80,000 tonnes of polyethylene and 100,000 tonnes of polypropylene (PP) to the country each month.

 

With the strike tightening polymer supply, the current bearish China market, especially for PP resin, might be poised for a revival, said some domestic traders.

 

Domestic PP in China continued to see weakness currently, the second week of decline after sharp gains in early June, with prices slipping yuan (CNY) 400-200/tonne ($58-29/tonne) to CNY16,000-17,200/tonne EXWH (ex-warehouse) E China (east China), after a CNY100-500/tonne drop last week, traders said.

 

The downturn was mainly due to previous mark-ups on tight supply, said traders.

 

Domestic China PP supply had already been hit this month by a reduction in output by Sinopec related to its earthquake relief efforts and a fire at a Maoming Petrochemical plant.

  

In view of the strike, market participants expected high PP prices in June but they felt the values were likely to fall when the shortage was relieved in July. 

 

The ongoing truckers’ strike in South Korea went nationwide on 13 June, with drivers demanding higher wages and fuel subsidies.

 

($1 = CNY6.88)

 

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By: Longston Li
+65 6780 4359

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