The South Korean government held a meeting on Apr 15 to assess the supply and demand situation for crude oil and naphtha, which was attended by relevant ministries and officials from oil refining and petrochemical companies. At the meeting, the current status of crude oil and naphtha procurement imported by South Korea, as well as production in the oil and petrochemical sectors, was confirmed.

At the meeting, it was announced that a support project worth 674.4 bil Won would be promoted to diversify naphtha procurement. Its main feature is guaranteeing 50% of the difference between pre-war prices and import prices for contracts covering April to June. In addition to naphtha, alternative feedstocks such as LPG and condensate, as well as basic chemicals like ethylene and propylene, were designated as targets.

The South Korean government aims to avoid a production crisis of petrochemical products due to tight naphtha supply and demand fundamentals, and secure the supply of petrochemical products for domestic medical and key industries. It was heard from traders handling ethylene and propylene that inquiries from South Korean petrochemical manufacturers have become more active since the beginning of this week.