LG Chem

South Korean prosecutors probe seven petrochemical makers for price-fixing

South Korean prosecutors have raided seven domestic chemical companies and summoned suspects for questioning over alleged collusion to fix prices on eight petrochemical products, among them PVC, plasticizers, caustic soda and hydrochloric acid. The investigation now reaches back to 2021, widening the sales base against which any sanction would be set. Industry officials say fines booked as operating expenses would deepen losses in a sector already expected to swing to a third-quarter deficit, and some firms are weighing leniency applications.

Why this mattersAny large fines land on the PVC and plasticizer suppliers that packaging converters buy from, in a sector already loss-making and cutting investment.

• Prosecutors raided seven South Korean chemical companies last month and have since summoned suspects for questioning; the companies are not named in the report.
• Alleged collusion covers eight products including PVC, plasticizers, caustic soda and hydrochloric acid.
• The probe has been extended back to 2021, potentially widening the scale of relevant sales and sanctions.
• Prosecutors are examining whether naphtha supply instability caused by the Middle East war was exploited for illicit gains.
• As sector context, analyst consensus for LG Chem's Q3 operating profit is about USD 137m (KRW 186.5bn), against USD 442m (KRW 599.6bn) in Q2.
• Lotte Chemical, also cited as sector context, is expected to post a Q3 operating loss of about USD 105m (KRW 142.5bn), against a USD 81m (KRW 110.1bn) profit in Q2.

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