PATTAYA, Thailand (ICIS)--South Korea is expected to increase petrochemical production by 2.4% this year to 22.4m tonnes after an increase of 2.2% in 2013, the Korea Petrochemical Industry Association (KPIA) said on Thursday.
Domestic demand is expected to increase at a higher rate of 3.2% in 2014 to 11.1m tonnes, the KPIA noted in its country report released at the Asia Petrochemicals Industry Conference (APIC).
While the KPIA noted lack of new investment, it said operating rates would increase on the back of higher exports.
However, it noted challenges in the export of synthetic fibre raw materials as China has made major strides in self-sufficiency in this area.
Domestically, demand will be driven by an improvement in overall GDP, expected to be up 3.8% in 2014 versus 2.8% in 2013. Strength was noted in the automotive and home appliance sectors, said the KPIA.
Synthetic resin production in 2014 is projected to rise 3.8% to 13.2m tonnes with domestic demand up 3.5% to 5.6m tonnes.
In 2013, exports of polyethylene (PE) and polypropylene (PP) to China and other Asian countries rose, while those of polyvinyl chloride (PVC) and polystyrene (PS) were more challenged as China increased its own production in the latter resins.
Exports in 2014 are expected to continue their strong trend, especially in PE and PP on lack of new capacity additions in both the Middle East and China, noted the KPIA.
Synthetic rubber production in 2014 is projected to gain 4.8% to 1.09m tonnes while domestic demand will be up 3.8% to 440,000 tonnes, the association said.
For export-oriented end markets, automotive production in South Korea is expected to grow 2.7%, while production of communication devices is projected to advance 4.8% in 2014, according to the KPIA.
APIC is being held in Pattaya, Thailand, from 15-16 May.