The government said on the 14th it will ban hoarding of seven basic petrochemical feedstocks made from naphtha, including ethylene and propylene, starting at midnight. The measure runs through June 30. The step comes as the prolonged Middle East crisis keeps naphtha supplies unstable.
The government said it has issued a Notice on the Prohibition of Hoarding and the Emergency Supply and Demand Adjustment for seven feedstocks produced from naphtha—ethylene, propylene, butadiene, benzene, toluene, xylene and other feedstocks—and will enforce it from midnight.
The seven are representative products made using naphtha at naphtha cracking centers (NCC). They are reprocessed to make items such as vinyl and packaging materials.
The notice is based on the Price Stabilization Act. Under it, businesses that manufacture or import the seven feedstocks must not hold inventories exceeding 80% of last year's stock levels. Violators may face corrective orders from the government and up to three years in prison or fines of up to 100 million won.
The government also said that if supply instability continues despite the hoarding notice, it will implement emergency supply and demand adjustments for the seven basic feedstocks. Once in effect, manufacturers and importers must report production, shipments and inventory levels to the government, which may issue orders on production, supply and shipments.
The government also decided to review whether to designate intermediate goods such as polyethylene (PE), which is made using ethylene and propylene, and final goods such as medical infusion bags and packaging containers for hoarding bans and emergency supply and demand adjustment notices.