Financial Sector Expands Naphtha Import L/C Limit for Yeochun NCC

Support Scheduled for Implementation in May

Korea Development Bank Shortens Review Period to Two Weeks

First Application of Financial Support System for Petrochemical Industry

The government and the financial sector will expand the import letter of credit (L/C) limit for Yeochun NCC to stabilize its naphtha supply. This marks the full-scale activation of a support system for the petrochemical industry, as uncertainties in raw material procurement have grown amid heightened tensions in the Middle East.

Yonhap News Agency

According to the Financial Services Commission on May 7, a voluntary creditors’ council was convened to support the stabilization of Yeochun NCC’s naphtha supply. At the meeting, a financial support proposal was submitted to raise the naphtha import L/C limit by 300 million dollars. An import letter of credit is a payment instrument in which a bank guarantees payment to the seller on behalf of the importer.

The proposal is scheduled to be implemented around May 18, following a resolution by the creditors on May 15. The creditors of Yeochun NCC include Korea Development Bank as the main creditor bank, as well as KB Kookmin Bank, Woori Bank, Hana Bank, Shinhan Bank, Nonghyup Bank, and Export-Import Bank of Korea.

This support measure is in response to the recent increase in volatility in the international energy market due to instability in the Middle East. On April 29, Yeochun NCC requested Korea Development Bank to expand its L/C limit in order to secure a stable naphtha supply.

Korea Development Bank promptly began a simplified due diligence process in accordance with the “Joint Financial Support System for Naphtha Imports in Response to Middle East Conditions,” which was established by the financial sector last month. The usual procedures, which took more than six weeks, were shortened to approximately two weeks.

Korea Trade Insurance Corporation also plans to provide import insurance worth 50 million dollars to back up the financial sector’s support.

The financial authorities expect that this support will enable Yeochun NCC to secure raw materials smoothly, even in emergencies such as a sharp rise in naphtha prices or supply disruptions.

The financial sector plans to continue providing prompt financial support through the joint support system to ensure that naphtha imports by the petrochemical industry remain uninterrupted.

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