The Democratic Party of Korea said Monday it is reviewing a plan to support the supply of naphtha, a key raw material for synthetic resins, through a supplementary budget and use the measure to curb the scale of synthetic resin price increases.
The party's Euljiro Committee and the government held the second meeting of a "social dialogue body" the same day. Attendees included the Korea Plastic Industry Cooperative Federation, the Korea Plastic Packaging Container Association, and six petrochemical companies — SK Geocentric, Hanwha Solutions, LG Chem, GS Caltex, Lotte Chemical, and S-Oil.
Rep. Kwon Hyang-yeop said in a briefing after the meeting, "We are reviewing a plan to subsidize 50% of the increase in naphtha import unit costs through a supplementary budget to reduce the scale of synthetic resin supply price hikes." She added, "We demanded that petrochemical companies ease not only March synthetic resin prices but also the April prices that have already been notified."
"There were also demands to introduce a staggered pricing system that raises prices at two-week intervals," Kwon said. "The petrochemical industry, plastic industry, and government agreed to actively discuss adopting a pricing system with less volatility during periods of sharp price swings."
"The government has decided to make an all-out effort, including through a supplementary budget, to secure a stable supply of naphtha," Kwon added. "The government will prevent hoarding of synthetic resins, and petrochemical companies have also agreed to actively cooperate."
Rep. Kim Nam-geun also said, "The government has agreed to actively work toward a stable supply of naphtha." He noted, "Despite petrochemical companies increasing domestic volumes, plastic firms have pointed out that supply has not kept pace. The government has decided to actively monitor issues such as hoarding at a pan-government level."
The Democratic Party plans to sign agreements with the industry on March 9 covering: △ a mutual benefit agreement on supply prices for synthetic resin and plastic raw materials; △ a mutual benefit agreement to reflect material cost increases in delivery payments; and △ a mutual benefit agreement to reform post-settlement transaction practices in the refining industry.