Petrochemical Industry Warns of Possible ABS Supply Disruptions... Supply Chain Instability Becomes Reality for Auto Parts Makers
LG Chem and Lotte Chemical Notify of Potential "Force Majeure"
ABS Supply at Risk... Concerns Over Impact on Automobile Production
The domestic petrochemical industry has reportedly informed automakers and material processing companies of potential disruptions in the supply of ABS (Acrylonitrile Butadiene Styrene) products. As instability in the procurement of key materials due to Middle East-related risks becomes a reality, there is growing tension across the industry.
On the 9th, when international oil prices surpassed 100 dollars per barrel, steam rose from a petrochemical complex factory in Yeosu City, Jeollanam-do. Photo by Yonhap News Agency
View original imageAccording to industry sources on March 19, LG Chem and Lotte Chemical have recently provided advance notice to their clients regarding the possibility of a 'force majeure' event affecting ABS supply. A force majeure refers to a measure that exempts a party from liability for failing to fulfill a contract due to external factors such as war.
Industry insiders believe that if the conflict is prolonged, ABS supply could be partially restricted as early as the end of this month. However, it is not yet at the stage of an official force majeure declaration, and companies have explained that their intention is to encourage proactive responses such as diversifying supply chains.
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ABS is a core material for automotive interior and exterior parts, used in dashboards, door trims, and center consoles. There have been previous cases where force majeure was declared for base feedstocks such as ethylene due to issues in securing the raw material naphtha, but this is the first time such measures have extended to a finished product material like ABS. The price of ABS, which was around 1,190 dollars per ton in January, has recently risen to 1,550 dollars—an increase of roughly 30 percent in just two months.
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