South Korea's major petrochemical companies expand operating losses to 1.5 trillion won in 2025, industry restructuring still needs long-term progress

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South Korea's major petrochemical companies have an initial total operating loss of 1.5 trillion won (about 7.8 billion yuan) in 2025, a significant increase from 1.1 trillion won in 2024.

Recently, South Korea's well-known credit rating agency NICE Investor Service Company (NICE Investors Service) released a report showing that South Korea's major petrochemical companies have an initial total operating loss of 1.5 trillion won (about 7.8 billion yuan) in 2025, which is larger than the 1.1 trillion won in 2024. The won has expanded significantly, and the industry downturn continues to intensify.
The report clearly points out that although South Korea's petrochemical industry has been in the red for two consecutive years from 2024 to 2025, the sharp jump in the spread of core products, inventory impairment losses and a number of one-time costs in the fourth quarter of 2025 have become the direct driving force for the further deepening of the annual loss. NICE officials said: "In the fourth quarter of 2025, the industry suffered large losses due to the combination of a sharp decline in core product spreads, inventory valuation losses and other one-time costs, which eventually led to a significant increase in the scale of the annual loss."
The statistics cover 8 core petrochemical enterprises in South Korea, including LG Chemical (excluding LG New Energy Business), Lotte Chemical, Korea Petrochemical Industry Company (Korea Petrochemical Industry Co.), Hanwha Solutions Company (Hanwha Solutions), SKC, Guodu Chemical, Kumho Petrochemical and Xiaoxing Chemical. In the face of the industry's continued downturn, a number of companies have set aside large one-time fees in 2025 to promote long-term restructuring plans. Among them, LG Chemical accrued a one-time cost of 1.9 trillion won in the fourth quarter, which was mainly used for "expected adjustment and strategic transformation of petrochemical, battery and material businesses". Affected by this, the company's operating loss in the current quarter reached 413 billion won, and the annual net loss was as high as 1.57 trillion won. During the same period, Rakuten Chemical recorded an asset impairment loss of approximately KRW 1 trillion on goodwill and tangible assets due to "a downward revision of earnings expectations in a continued weak industry environment.
In terms of product performance, the imbalance between supply and demand in South Korea's olefin sector continues to be prominent, the oversupply situation has not been improved, and the recovery process of demand lags behind, resulting in a sharp decline in the price difference of related products in the fourth quarter of 2025. The aromatic sector performed relatively well, showing a warming trend in the second half of 2025, with the price of paraxylene (PX) products returning to above the break-even line, becoming one, becoming one.
NICE particularly stressed that although the restructuring of South Korea's petrochemical industry has been officially launched, it still takes a long time to achieve substantial results. At present, the industry is facing multiple challenges such as oversupply and weak demand. The South Korean government has introduced targeted measures to set an ethylene production capacity reduction target of 2.7 million to 3.7 million tons per year. However, NICE pointed out that substantive adjustment measures such as plant shutdown, integration and pipeline relocation still need a long period of time to be implemented and effective due to many obstacles involved in complex multi-party negotiation and implementation.

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