Chemical Industry "Increased Demand for Hygiene Products such as Masks, Latex Gloves, and Hand Sanitizers"

[Asia Economy Reporter Park So-yeon] The domestic chemical industry showed sluggish performance in the first quarter due to the impact of the novel coronavirus infection (COVID-19).

However, demand related to hygiene products such as masks, mouthwash, and latex gloves partially absorbed the shock of COVID-19.

According to the first-quarter earnings announcements of major chemical companies on the 10th, most operating profits decreased compared to the first quarter of last year as front industries such as automobiles and home appliances shrank due to COVID-19.

LG Chem's operating profit was 236.5 billion KRW, down 15.9% from the same period last year, and Kumho Petrochemical's operating profit was 133.1 billion KRW, down 7.2% from the same period last year.

Lotte Chemical, which was hit by the Daesan plant explosion accident, recorded an operating loss of 86 billion KRW in the first quarter, turning to a deficit compared to the same period last year (operating profit of 297.8 billion KRW).

Although the spread (price difference between raw materials and final products) of major petrochemical products improved due to the decline in international oil prices, it is interpreted that sluggish performance was recorded due to the overall decrease in demand.

Some companies reduced the decline in performance as sales of materials for hygiene products, whose demand increased due to COVID-19, increased.

SKC announced that propylene glycol (PG), mainly sold as a material for beverages and cosmetics, saw increased sales for mouthwash and hand sanitizer purposes, and the joint venture SK PIC Global, which produces PG, recorded stable performance in the first quarter.

An SKC official said, "Due to mask-wearing, demand for mouthwash increased, and sales of PG for mouthwash more than doubled compared to the average of last year," adding, "Sales of PG for basic cosmetics also increased."

SKC also stated that in the film sector, sales of products for 'face shields (face shield, cashier shield)' increased due to increased demand from medical staff and service workers. Sales of X-ray film also showed growth.

SK Chemicals reported that although first-quarter sales decreased by 20.9% due to the expansion of new demand related to quarantine such as face shields, operating profit increased by 119%.

In the case of Kumho Petrochemical, first-quarter sales were 1.2254 trillion KRW, down 3.6% from the same period last year, but sales of the synthetic rubber division in the first quarter were 469.3 billion KRW, down 1.7%.

A Kumho Petrochemical official explained, "In the synthetic rubber sector, high-cost inventory was cleared in the first quarter, and product spread improved due to a decline in raw material prices, securing profitability with solid demand for NB latex and others."

NB latex is analyzed as the raw material for latex gloves, known as 'nitrile gloves,' whose demand increased due to COVID-19.

Hyosung Chemical started producing spunbond PP, a raw material for mask yarn, at some facilities of its polypropylene (PP) plant in Vietnam from last month.

A Hyosung Chemical official explained, "Spunbond PP is sold to companies producing nonwoven fabrics used for masks and medical gowns as a raw material for long fibers," adding, "Due to increased demand from COVID-19, the Vietnam plant was expanded."

Isu Chemical, which produces isopropyl alcohol (IPA), a raw material for hand sanitizers, is recently benefiting as ethanol shows a shortage. According to Isu Chemical, new IPA orders were received in the Philippines in the first quarter.

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