LotteChemical Surges 10.95% on July 23 as Seoul Approves Petrochemical Capacity Cuts

According to South Korea's Ministry of Trade, Industry and Energy, on July 23, LotteChemical shares rose 10.95% over two days following the government's approval of the Yeosu 1 petrochemical restructuring plan. Hanwha Q Cells rose 12.78% and DL Chemical climbed 10.65% over the same period. The restructuring involves shutting down Yeosu NCC units 2 and 3 for three years or longer, reducing annual production capacity by 1.39 million tons, while an additional 1.1 million tons will be cut at the Daesan complex, bringing total capacity reductions to 2.49 million tons.

The reduction target represents 67 to 92 percent of the government's restructuring goals and marks a shift from planning to implementation phase. However, analysts caution that supply pressures will persist as S-Oil's Shaheen petrochemical project is set to commence operations in the first half of 2027, offsetting some of the production cuts.