[Exclusive] "Concerns Over Disruptions to National Power Grid Projects"... Cable Industry Sends 'Raw Material Emergency' SOS to KEPCO

Impact on Crude Oil and Naphtha Supply if War Prolongs
Disruption in Supply of Key Cable Insulation Materials
Two Months of Inventory Secured, Extended Conflict Would Cause Damage
Industry Warns KEPCO: "National Power Grid Projects May Be A

Amid a series of shocks rippling through the industrial sector due to the Iran war, the cable industry has conveyed the need for Korea Electric Power Corporation (KEPCO) to respond. There is growing concern that if the conflict becomes prolonged, both cable manufacturers supplying cables for the national power grid and KEPCO, the main client, could face production disruptions.

According to industry sources on April 9, domestic cable companies recently notified KEPCO of potential instability in raw material supplies stemming from the Iran war. This stems from the belief that the aftermath of the conflict, which has destabilized the supply of crude oil and naphtha, could also affect the procurement of insulation materials—key components for cable production.

Polyethylene (PE) and polyvinyl chloride (PVC), which are essential for the insulation and sheathing layers of cables, use naphtha as a primary feedstock. Currently, cable manufacturers have secured inventory sufficient for about two months, avoiding immediate shutdowns. However, if the war becomes protracted, they will inevitably face deteriorating profitability and reduced production volumes due to rising raw material costs.

Despite the United States and Iran having agreed to a temporary two-week ceasefire and the reopening of the Strait of Hormuz, market uncertainty remains high. The cable industry, in particular, believes that if logistics risks escalate—such as reduced operating rates at major petrochemical complexes inside Iran or rising transportation costs—there could be widespread disruptions to the national power grid expansion projects scheduled for the second half of the year.

Photo of a transmission line. Yonhap News Agency.

In fact, KEPCO has officially begun designing the West Coast High Voltage Direct Current (HVDC) Energy Expressway project and is currently conducting large-scale cable manufacturing tenders. As this project is a core initiative to transmit renewable energy from the west coast to the Seoul metropolitan area, any delay in raw material procurement could directly undermine national energy security. An industry insider explained, "If there are setbacks in material procurement, the national power grid projects are highly likely to face successive delays."

In response, the cable industry is accelerating efforts to strengthen its supply chain. Companies are working to reduce reliance on short-term spot contracts while increasing the proportion of long-term agreements (LTA) of one year or more to enhance supply stability. Furthermore, they are formalizing a 'supply chain diversification' strategy to decrease dependence on materials from the Middle East and Europe—regions with high geopolitical risk—and expand sourcing to the United States and Southeast Asia, thereby entering a company-wide emergency response mode.

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