"Improvement of Financial Stability in the Petrochemical Industry"

[Asia Economy Reporter Park So-yeon] Although the burden on the domestic petrochemical industry has increased due to the COVID-19 pandemic and oil price volatility, credit ratings are expected to remain stable.

Lee Hyuk-jun, Senior Researcher at the Corporate Evaluation Division of NICE Credit Rating, stated at an online e-seminar held on the 16th, "The credit rating outlook for domestic petrochemical companies will remain stable."

Lee mentioned, "Domestic petrochemical companies significantly improved their performance during the boom period from 2016 to the first half of 2018, and in the process, enhanced financial stability by reducing borrowings."

He added, "Although performance declined entering the recession period and borrowings increased due to working capital and investment burdens, the burden is expected to be limited."

However, Lee noted, "Amid negative industry conditions such as increased supply from China, decreased demand due to the spread of COVID-19, and the expansion of ethane cracker (ECC) plants in the United States, recent oil price volatility has increased, raising medium- to long-term uncertainties in the petrochemical sector."

He further stated, "We will strengthen monitoring of petrochemical companies showing significant fluctuations in performance and increased financial burdens and reflect these in rating changes."

This content was produced with the assistance of AI translation services.