The worst days are behind chemical firms

• Published in: Business Korea Vol. 17; no. 1; p. 25
• Main Author: Hyun-Joon, Hwang
• Format: Trade Publication Article
• Language: English
• Published: Seoul Business Korea Ltd 01.01.2000
• Subjects: Affiliates; Business cycles; Business forecasts; Corporate profits; Crude oil; Crude oil prices; Currency transactions; Domestic markets; Electronic commerce; Financial performance; Industrywide conditions; Interest rates; Investments; Petrochemicals industry; Petroleum refineries; Profitability; Raw materials; Seasons; Statistical data; Trends; South Korea
• ISSN: 1016-5304

The business cycle of Korea's petrochemical industry, which has continued in a long-term downward trend since 1995, seems to have bottomed out in the third quarter of 1999. This can be explained by the fact that price margins remained stable in the fourth quarter despite a sharp fall in the price of both raw materials (naphtha) and petrochemicals products. The recent plunge in prices is mainly attributed to seasonal decreases in demand and clearance of stockpiles that had been accumulated in line with Y2K issues. The long-term upward trend of the business cycle is expected to begin in 2000 and reach a new peak by the end of the first half of 2002. Consequently, an industrywide movement in profit structure and cash flow is expected in 2000 and 2001, with the industry average of growth of EBTIDA reaching 20%.