South Korea Bans Hoarding of Seven Petrochemical Raw Materials Including Ethylene
2026-4-23
The conflict in the Middle East has triggered a severe raw material shortage crisis across South Korea¡äs petrochemical industry chain. On the 14th, South Korea¡äs Ministry of Trade, Industry and Energy (MOTIE) and the Ministry of Economy and Finance announced a ban on hoarding seven types of basic petrochemical feedstocks produced from naphtha, effective April 15.
Under the government regulation, seven basic chemical raw materials derived from naphtha are designated as prohibited items for hoarding: ethylene, propylene, butadiene, benzene, toluene, xylene, and other distillate fractions. Manufacturers or importers of these seven materials must cap their inventory levels at no more than 80% of the previous year¡äs volumes.
The South Korean government stated that if any raw materials or products made from basic chemical feedstocks are found to be at risk of supply-demand imbalance, it will expand the scope of the hoarding ban through inter-agency consultations to respond swiftly to market changes.
Furthermore, if supply tightness persists despite the hoarding ban, the government will consider imposing emergency controls on the production, release, and distribution of relevant products.
Data shows that 77% of South Korea¡äs naphtha demand is sourced from the Middle East. Since the outbreak of the Middle East conflict on February 28, naphtha prices have surged sharply due to supply disruptions caused by the blockage of the Strait of Hormuz.
Under the government regulation, seven basic chemical raw materials derived from naphtha are designated as prohibited items for hoarding: ethylene, propylene, butadiene, benzene, toluene, xylene, and other distillate fractions. Manufacturers or importers of these seven materials must cap their inventory levels at no more than 80% of the previous year¡äs volumes.
The South Korean government stated that if any raw materials or products made from basic chemical feedstocks are found to be at risk of supply-demand imbalance, it will expand the scope of the hoarding ban through inter-agency consultations to respond swiftly to market changes.
Furthermore, if supply tightness persists despite the hoarding ban, the government will consider imposing emergency controls on the production, release, and distribution of relevant products.
Data shows that 77% of South Korea¡äs naphtha demand is sourced from the Middle East. Since the outbreak of the Middle East conflict on February 28, naphtha prices have surged sharply due to supply disruptions caused by the blockage of the Strait of Hormuz.