SEOUL: Fears of a plastic and vinyl product shortage are spreading in South Korea, as geopolitical tensions in the Middle East have disrupted the global supply of naphtha and prompted some consumers to stockpile municipal garbage bags.
According to the Korea Federation of Plastics Industry Cooperatives on Tuesday (March 24), 71 per cent of the 37 surveyed companies reported receiving notices from petrochemical suppliers about potential reductions or suspensions in synthetic resin shipments.
About 92 per cent said they were informed of price increases for raw materials.
Naphtha, a petroleum-derived chemical, is used to produce most plastics and vinyl products, from garbage bags to food packaging and polyethylene terephthalate bottles.
The persistent conflict involving the United States, Israel and Iran has disrupted the supply.
Although South Korean refiners produce some naphtha domestically, about 40 to 45 per cent of national consumption relies on imports.
More than half of those imports pass through the Strait of Hormuz, where a blockade now entering its fourth week has pushed prices beyond record levels and raised the possibility of an outright supply halt.
In light of the looming naphtha shortage, the Seoul government on March 24 said it is mulling export restrictions on the substance created locally.
The plan calls for gradually adjusting exports – which account for about 40 per cent of total production – and diverting those volumes to domestic supply in an effort to mitigate the impact of the ongoing crisis.
Industry officials say remaining domestic naphtha inventory amounts to roughly two weeks of demand. With crude oil supplies themselves unstable, even ramping up local production is becoming increasingly difficult, they warn.
Following Iran’s blockade of the waterway, naphtha availability has tightened sharply and related material prices have soared.
Data from the Korea National Oil show international naphtha prices jumped from US$56.90 per barrel in early January to US$129.70 last week, a 127.9 per cent surge.
Major petrochemical producers have begun reducing operations. LG Chem said it would halt operations at its No. 2 naphtha cracking centre in Yeosu, South Jeolla Province, until supply conditions improve.
Manufacturers of government-regulated garbage bags said they have only about one month of raw material inventories remaining.
The rush for plastic bags
Consumer anxiety has risen in recent days. Retailers report a rapid increase in demand for standard garbage bags, with shoppers sharing complaints on social media about empty shelves and purchase limits.
“I went to several markets but couldn’t buy any,” one user wrote on Instagram, while others said stores allowed only two packs per person. Some reported visiting multiple convenience stores to secure extra supplies.
Online sellers are also experiencing delays. One website selling garbage bags posted a notice that production and restocking schedules were being disrupted by global volatility.
Industry officials and analysts say longer-term measures are needed as the conflict’s effects continue to unfold. With raw material prices rising amid signs of a prolonged war, they warn that the financial burden could soon spread to ordinary consumers and small business owners.
Hansung University economics professor Kim Sang-bong noted that even when disruptions begin upstream, the damage ultimately reaches small businesses.
“Even if the problem originates in the supply chain, the impact eventually hits the smallest merchants,” he said, calling for government support measures ranging from tax relief to securing alternative materials.
Industry officials estimate nationwide inventories at roughly one month. The Ministry of Climate, Environment and Energy has directed local governments to conduct a complete inventory check of garbage bag stocks.
Amid growing public concern, the Ministry of Trade, Industry and Resources said it is operating a supply-chain support centre to monitor 30 to 40 key consumer-related items closely.
“We will manage the situation meticulously to prevent exaggerated concerns from triggering market disruptions or panic buying,” said Park Dong-il, director-general for industrial policy. He added that the list of monitored items would be expanded as needed.
The Seoul Metropolitan Government also convened an emergency economic meeting to review the production and distribution of municipal garbage bags. - The Korea Herald/ANN
