Seoul: The government is actively collaborating with the shipbuilding and chemical industries to ensure the uninterrupted supply of ethylene in the short term, as stated by the industry ministry. This comes amid ongoing efforts to mitigate supply chain risks arising from the turmoil in the Middle East.

According to Yonhap News Agency, South Korea is facing potential disruptions in ethylene supply, a critical material for shipbuilding, due to shortages in naphtha imports. These imports predominantly come through the Strait of Hormuz, which is effectively closed because of the Iran crisis. In response, the Ministry of Trade, Industry and Resources recently assessed the demand for ethylene from local shipbuilders and developed a short-term supply plan to address immediate needs.

Ethylene, essential for cutting steel in the shipbuilding sector, is derived from naphtha through a cracking process. To prevent supply chain disruptions, the ministry has committed to securing alternative import sources for naphtha. Additionally, the government is exploring measures to alleviate the cost burden associated with naphtha imports and is considering restrictions on exports of the material to prioritize domestic needs.

The ministry emphasized its dedication to minimizing any disruptions in the supply chains of both ethylene and naphtha, ensuring stability within the shipbuilding industry during this challenging period.

Source: Yonhap News Agency