“Reduce cost increases for March-April”… Petrochemical-Plastic win-win agreement

In a significant move towards industrial cooperation, South Korea's petrochemical and plastics industries have forged a social dialogue agreement to mitigate the impact of rising raw material costs. The agreement, facilitated by the Democratic Party's Euljiro Committee, addresses the sharp increase in synthetic resin prices, a direct consequence of the protracted Middle East conflict.

Petrochemical firms have consented to scale back the previously announced price hikes for synthetic resins for April and May. Furthermore, they have pledged to consider further reductions in supply prices after April, contingent on the government's expanded financial assistance. This commitment is crucial for the survival of small and medium-sized plastic manufacturers who are bearing the brunt of the price surge.

The government's role is pivotal, with a supplementary budget of 678.3 billion won allocated to support naphtha imports, the primary raw material for synthetic resins. This financial injection aims to subsidize 50% of the increase in naphtha import costs. The agreement also stipulates that both industries and the government will discuss a more stable pricing system during supply crises, with the government ensuring domestic supply of essential petrochemical products and companies prioritizing domestic supply.