Wedoany.com Report-Dec.20, South Korea's petrochemical sector is advancing its restructuring initiatives as several major companies submit plans to the government.

On December 19, 2025, LG Chem (051910.KS) announced that it had submitted a proposal to reorganize its petrochemical operations. The company stated that this submission aligns with the government's encouragement for the sector to undertake adjustments. LG Chem noted that specific details of the plan could not be shared at this time.

Separately, DL Chemical Co., a key stakeholder in Yeochun NCC along with Hanwha Solutions Corp (009830.KS), also forwarded a restructuring proposal to the authorities. A spokesperson for DL Chemical confirmed this development in a message to Reuters. Representatives from Hanwha Solutions and Yeochun NCC did not provide immediate responses to inquiries regarding the matter.

These submissions involve firms operating naphtha-cracking facilities, which are part of broader efforts in the industry to optimize annual production capacity, with potential reductions of up to 25%.

Earlier, in November 2025, HD Hyundai and Lotte Chemical presented a joint proposal to the trade ministry. The plan involves Lotte Chemical separating a portion of its operations for integration with HD Hyundai Chemical.

These developments reflect ongoing measures by South Korean petrochemical companies to enhance operational efficiency and adapt to market conditions. The government's framework supports such voluntary adjustments through various incentives, while encouraging a shift toward higher-value products.

Industry observers note that these steps aim to strengthen competitiveness in a sector facing global supply dynamics. Additional plans from other participants are anticipated as the restructuring process continues.