South Korea Overhauls Chemical Industry Amid Oversupply Challenge
South Korea launched a five-year strategy to overhaul its chemical industry, shifting from commodity products to high-value, eco-friendly specialties. Facing chronic oversupply from China, Seoul aims to become the world's fourth-most advanced chemical industry by 2030. The plan includes expanding R&D, accelerating advanced technology commercialization, promoting AI adoption, and fostering an innovation alliance. This strategy supports broader petrochemical restructuring, ensuring sustainable growth and global competitiveness through higher-margin, technology-driven products.
The South Korean government has announced a comprehensive five-year strategy aimed at overhauling its chemical industry, addressing intense competition and chronic oversupply, particularly from China. This ambitious plan seeks to elevate South Korea's chemical industry from its current fifth-place ranking to the world's fourth-most advanced by 2030, focusing on a critical transition towards high-value and environmentally friendly products. The core of the strategy involves moving away from the large-scale production of commodity chemicals, such as ethylene and propylene, which are increasingly under pressure due to China's expanding capacity. Instead, the industry will pivot towards developing specialty materials vital for advanced manufacturing sectors. Key target areas include packaging materials for on-device artificial intelligence chips, components for foldable and wearable electronics, electrolytes for next-generation lithium batteries, and sophisticated electronic systems for electric vehicles. To facilitate this transformation, the government will significantly increase funding for research and development, accelerate the commercialization of advanced technologies, and actively promote the integration of artificial intelligence across chemical manufacturing processes. A crucial element of this initiative is the establishment of a chemical industry innovation alliance, uniting approximately 130 chemical companies and research institutions to coordinate investment, technology development, and supply-chain collaboration. This strategic overhaul aligns with ongoing restructuring efforts within the broader petrochemical sector, where major producers are already planning cuts to naphtha cracking capacity. Officials expect this integrated approach to balance downsizing in commodity chemicals with a robust, sustainable growth path driven by higher-margin, technology-intensive products, ultimately preserving the industry's global competitiveness for the next decade.
