Petchem players evaluate China’s boycott decision on S Korea’s Lotte
Although China warned South Korea that this move would potentially harm the friendship between the two countries, Lotte did not seem to have stepped back from its decision, after which the pressure on the company was intensified in various platforms in China.
Following the calls of not visiting Lotte Duty Free Shops and South Korea, 80% of Lotte supermarkets in China were closed by mid-March, a majority of which were shut down by the government due to fire code violations while the rest had to be closed down because of nationalistic protests.
South Korea predicted the possible loss from the boycott and clashes in China in March could reach $66 million and cause the company to withdraw from China.
Following these developments, several players in the petrochemicals industry evaluated the impacts of the boycott.
Some players claimed that the boycotts had a negative impact on South Korea’s polymer exports to China in early March as Chinese banks refused to provide loans to Lotte’s customers, which pushed South Korea to shift exports to other markets especially to Southeast Asia.
Affirming this comment, a Malaysian converter said, “A South Korean joint venture in China is aggressively looking for export outlets to divert its cargoes as South Korea is boycotted in China.”
However, others did not report a major impact of it on the market.
A Chinese trader commented, “We think the recent decision about boycotting South Korea has not affected the petrochemical side as no major issues have been reported so far.”
Another Chinese trader opined,” China is boycotting the Lotte brand. However, we haven’t heard any impact on the petrochemical industry.”
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