Government Strengthens Response to Ukraine Crisis... Provides Total of 2.25 Trillion Won Support to Affected Companies

Ministry of Industry Holds '21st Industrial Resource Security TF Meeting'... Reviews Response Measures
Raw Material Prices Surge for Nickel and Anthracite... Ukraine Trade Virtually Halted
Additional 50 Billion Won Injected into Trade Promotion Funds... Strengthening International Energy Cooperation

Russia Support Belarus Subject to Export Controls on Strategic Items
(Seoul=Yonhap News) Reporter Hong Haein = On the 7th, the sanctions status board by country at the Strategic Materials Management Institute in Gangnam-gu, Seoul, displayed sanctions information against Russia.
The government held the 12th Emergency Response Task Force (TF) meeting on the Ukraine situation on the 6th and stated, "Based on the judgment that the Republic of Belarus is substantially supporting Russia's invasion of Ukraine, we have decided to implement export control measures against Belarus starting today."
The government announced that from the 7th, it will additionally enforce export restrictions on strategic materials and designate two entities as entities of concern, and will implement non-strategic material controls in the same manner as for Russia. The entities designated as entities of concern are the Belarus Ministry of Defense and one other. 2022.3.7
hihong@yna.co.kr
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[Asia Economy Sejong=Reporter Lee Jun-hyung] The government will invest 2.25 trillion won to support domestic companies affected by the Ukraine crisis.

The Ministry of Trade, Industry and Energy announced that on the 11th, it held the 21st Industrial Resource Security Task Force (TF) chaired by First Vice Minister Park Jin-gyu to discuss such measures. At this meeting, the ministry reviewed the urgent situation since the 20th TF held on the 23rd of last month, including Russia’s designation of South Korea as a non-friendly country and the U.S. ban on Russian oil and gas imports, and examined future response directions.

Industry and related agency officials attending the meeting unanimously agreed that corporate difficulties have become visible. A representative example is the international oil price, which recently surpassed $130 per barrel due to the impact of the Ukraine crisis. Domestic gasoline prices are also on the rise. On the 9th, the nationwide average gasoline price reached 1,892.4 won per liter, marking the highest level in about nine years since October 2013.

Gasoline Prices Reach Highest Level in 8 Years
(Seoul=Yonhap News) Reporter Lee Jae-hee = Due to the surge in international oil prices following Russia's invasion of Ukraine, domestic fuel prices continue to soar. On the 9th, the average retail price of gasoline at gas stations nationwide, posted on the Korea National Oil Corporation's price information site Opinet, reached 1,887.62 KRW per liter. This is the highest price in 8 years since March 2014. The photo shows the fuel prices posted at a gas station in Seoul on the same day. 2022.3.9
Photo by Lee Jae-hee
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Nickel Prices Double...Trade with Ukraine Halted

The situation is similar for raw materials. The price of nickel, a key material for secondary batteries, recently recorded about $34,000 per ton, nearly double last year’s average of $18,000. Last month, the price of anthracite coal surged about 81.8% to $249 per ton compared to last year’s average of $137. An industry official said, “There are concerns about the deterioration of corporate profitability due to rising raw material prices,” adding, “If Russia’s export ban and restriction measures on certain items, announced the day before, are fully implemented, the situation will worsen.”

Trade with Ukraine has virtually stopped. According to the Ministry of Trade, Industry and Energy, South Korea’s exports to Ukraine from the 1st to the 9th of this month plummeted 98.9% compared to the same period last year. Exports to Russia also decreased by 6.6% during the same period. The industry explained that trade with Russia is declining due to increased uncertainties in payment and logistics.

The automobile and shipbuilding industries emphasized the need for bold government support. Automakers expect that local factories will be difficult to restart for the time being as global shipping companies have suspended operations to Russia, causing difficulties in procuring parts and semiconductors. The auto parts industry is also concerned about foreign exchange losses due to the depreciation of the ruble, which they will receive as payment. The shipbuilding industry stated that risks are increasing due to the designation of remittance banks as Specially Designated Nationals (SDN), and supply disruptions of some equipment caused by sanctions against Russia.

IEA Member Countries Agree to Release 60 Million Barrels of Oil
(Seoul=Yonhap News) On the afternoon of the 1st, Moon Seung-wook, Minister of Trade, Industry and Energy, attended a video conference of the International Energy Agency (IEA) special ministerial meeting held at the Government Seoul Office Building, with energy ministers from 31 IEA member countries participating. On this day, the member countries agreed to release 60 million barrels of emergency oil reserves. March 2, 2022 [Provided by the Ministry of Trade, Industry and Energy. Redistribution and DB prohibited]
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Additional 50 Billion Won Injected...Plan to Approve Oil Stock Release at IEA

Accordingly, the government will inject additional funds to expand support for affected companies. The Ministry of Trade, Industry and Energy decided to provide an additional 50 billion won in trade promotion funds to supply liquidity to companies affected by the Ukraine crisis. Previously, the ministry had prepared support measures including the Financial Services Commission’s emergency financial support program (2 trillion won) and the Ministry of SMEs and Startups’ emergency management funds (200 billion won). To share risks for companies exporting to Russia, new trade insurance will also be offered with premiums and coverage rates up to 90%, the same level as before.

Efforts to stabilize energy prices are also being strengthened. Minister of Trade, Industry and Energy Moon Seung-wook plans to attend the International Energy Agency (IEA) Ministerial Meeting in Paris, France, from the 23rd to 24th of this month to strengthen international cooperation on energy, including official approval for the release of oil stocks. The ministry will monitor energy supply and price trends and prepare phased market stabilization measures if necessary. Specific details regarding Russia’s designation as a non-friendly country and export-import restrictions and bans will be shared with the industry as soon as they are confirmed.

Vice Minister Park said, “As the crisis prolongs, sanctions and risk factors from major countries are diversifying,” and urged, “Please strengthen efforts to diversify import sources and localize production to enhance the stability of raw material and energy supply chains.” He added, “We ask for cooperation from industry associations to prevent market disruptions such as hoarding, and we will monitor supply chains and, if necessary, review stabilization measures such as prohibiting hoarding, operating joint inspection teams, and emergency supply-demand adjustments with related ministries.”

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