Korea's petrochemical manufacturers face growing credit risks as China pulls back and persistently high capital expenditures plague the industry.
LG Chem logged a 29.9 percent drop in operating profit to 615.6 billion won in the second quarter, weighed down heavily by sluggish demand for petrochemicals.
Petrochemicals, previously one of Korea’s three largest export items alongside semiconductors and petroleum products, are stranded between lagging demand and a supply glut.
LG Chem is considering selling off its naphtha cracking facility amid weak demand for petrochemical products, according to local media reports.
With environmental bans pressuring the oil and petrochemicals industry to move away from traditional fossil fuels, companies are eyeing a breakthrough in plastic recycling.
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