From 'Mask' to 'Jusagi'... Hyosung Chemical Thrives Amid COVID-19 Special Demand

[Asia Economy Reporter Park So-yeon] Since the beginning of this year, Hyosung Chemical's polypropylene (PP) plant in Vietnam has been unexpectedly benefiting from the spread of the novel coronavirus (COVID-19). This is due to the surge in demand for spunbond PP used in masks, as well as the rapid increase in demand for medical PP used in syringes following the start of vaccination.

According to the industry on the 26th, with the recent global rollout of COVID-19 vaccinations, demand for medical PP has exploded. The industry estimates that even if only 50% of the world's population of 7.8 billion receives the vaccine, considering two doses per person, approximately 7.8 billion syringes will be needed.

The raw material for syringes is PP Homo, which commands a premium of about $200 per ton compared to general-purpose PP. The expansion of syringe demand is expected to be a factor improving overall global PP demand. Since medical PP faces regulatory barriers such as approval from the U.S. Food and Drug Administration (FDA), other companies find it difficult to enter the market easily, which is seen as a positive for existing companies. The domestic syringe PP market is about 11,000 tons, with Hyosung Chemical holding 65%, Lotte Chemical 18%, and GS 14% market share.

This year, Hyosung Chemical has actively responded to the unexpected increase in COVID-19-related demand, such as for spunbond PP used in masks. Currently, out of the global total PP production capacity of 90 million tons per year, more than 5 million tons are dedicated to spunbond PP production. With the addition of medical PP demand, domestic and overseas production lines are operating at full capacity.

PP is an essential synthetic resin used in industrial materials such as pipes and automotive interior and exterior parts, as well as everyday materials like kitchen containers and hygiene products, accounting for more than half of Hyosung Chemical's sales. The PP spread has exceeded $700 per ton for the first time since 2015, and the current PP variable margin rate has surpassed 40%, breaking the records set during the super cycles of 2010-2011 and 2016-2017. As of the end of this year, Hyosung Chemical's PP production capacity is 900,000 tons, ranking second domestically after Lotte Chemical. A Hyosung Chemical official stated, "We are preparing for the increase in demand following the full-scale vaccination rollout."

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