Amid the depending structural crisis stemming from a global supply glut, the government and the Korean chemical industry have teamed up to make 2026 the first year of the industry’s rebound for a new leap forward.
The Ministry of Trade, Industry and Resources (MOTIR) said the ministry and the Korean chemical industry pledged to tide over an industry crisis and ramp up its fundamental competitiveness.
The remarks were made at the 2026 Chemical Industry New Year’s Gathering at Lotte Hotel, Seoul on Jan. 16.
The event was attended by some 120 dignitaries of the chemical industry, including Nah Sung-hwa, director general for industrial supply chain policy at MOTIR and KCIA Chmn. Shin Hak-cheol.
Amid a full-fledged structural crisis, caused by the global supply glut in 2025, the government and the chemical industry joined forces to restructure the industry. All NCC (naphtha cracking center) and Propane dehydrogenation (PDH) companies in three petrochemical complexes submitted their restructuring plans by December to wrap up the first phase of the restructuring process.
During the event, the government demanded the industry’s swift execution of their restructuring plans for each project, and the former lent an ear to complaints and grievances they suffered in the process.
NCC is a facility for producing ethylene by decomposing naphtha in high temperatures, while PDH is a facility for producing propylene, a core material of plastic.
These facilities serve as pillars of the chemical industry, so failure or success of their restructuring is evaluated to have a direct impact on the competitiveness of the industry.
Director General for Industrial Supply Chain Policy Nah said, “Amid last year’s hard situation, the government and companies had closely cooperated and they had made an achievement of presenting business restructuring plans.”
He said the government and companies will team up to push ahead with restructuring in a full-fledged fashion this year, and steps will be taken to minimize negative impacts, such as hardships SMEs and middle-market enterprises suffer, and difficulties of the regional economy in the course of the restructuring process.
MOTIR plans to give the go-head to the Daesan No. 1 Project, now in a preliminary review, as soon as possible.
The ministry also plans to announce a package of support steps, such as financing, tax, R&D and deregulation, and it will fully cooperation with companies to help they submit final business restructuring plans of other projects.
In the first half of this year, the ministry plans to accelerate a follow-up restructuring process by announcing comprehensive steps to support the ecosystem of the chemical industry, encompassing large-scale support for a high value-added transition, technology development, manpower development and infrastructure buildup.
In his speech at the event, KCIA Chmn. Shin Hak-cheol said, “The Korean chemical industry has been grown as a core part of the basic industries to drive national economic growth on the back of its tremendous efforts and innovation amid a global competition for a half century, and let’s design 50 years for the so-called ‘2nd K-chemical,’ surpassing the past 50 years’ industry honor.”
“Last year, our chemical industry had a time of intense soul-searching, and (companies) made bold decisions by volunteer to reduce facilities for survival of the whole of the industry.”
He added that the private sector, the government and political circles reached a consensus.
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