South Korea Limits Naphtha Exports Amid Middle East Tensions

In light of ongoing tensions in the Middle East, South Korea is experiencing a surge in demand for garbage bags, driven by concerns over the supply of key raw materials used in plastic production. According to Jin10, South Korean media reported on March 26 that the government plans to classify garbage bags as a 'core control item' to monitor supply and demand, while assuring that current inventories are sufficient and stockpiling is unnecessary. The primary raw material for garbage bags, polyethylene, is derived from naphtha, which is processed from crude oil. Currently, approximately 55% of South Korea's naphtha demand is met by domestic production, while about 45% is imported directly. With disruptions in supply from the Middle East, industry experts are concerned that companies heavily reliant on naphtha imports may be forced to halt operations. In response to these concerns, the South Korean government announced on March 26 that it will restrict naphtha exports starting March 27. This measure aims to ensure stable domestic supply amid the geopolitical uncertainties affecting the region.