Journalist
Lee nakyeong
nakk@ajunews.com
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Diesel Prices in South Korea Top Gasoline, Raising Alarm for Transport Industries International oil prices have surged, pushing diesel — often seen as a working-class fuel — above gasoline in South Korea and raising alarms across industry. With the economy slowing and business conditions already weak, higher energy costs are expected to make it harder for transport-heavy sectors such as logistics, shipping, rail and aviation to protect earnings. According to Opinet, the Korea National Oil Corp.’s price information system, the nationwide average gasoline price at gas stations stood at 1,900.7 won per liter as of 1:30 p.m. Monday, up 5.3 won from the previous day. Diesel rose 6.1 won to 1,923.8 won per liter, overtaking gasoline. Since March 4, when the Middle East war intensified, gasoline has climbed 160.83 won per liter while diesel has jumped 264.45 won. It was the first time diesel exceeded gasoline since February 2023, about three years ago. Diesel typically trades below gasoline because taxes are lower due to heavy industrial use and its pricing tends to be more stable. But the war has increased uncertainty over diesel supply. When geopolitical risks rise, supply can tighten while demand is slow to fall. Diesel is widely used across the economy, including in freight trucks and buses, ships, construction equipment and generators. It is also used to power combat equipment such as tanks, armored vehicles and military trucks, keeping demand elevated. Rising diesel prices can ripple through industry, with logistics firms among the most exposed because fuel accounts for a large share of costs. In aviation, companies are said to be reviewing measures including raising fuel surcharges. Korean Air carries out oil-price hedging for up to 50% of its expected annual fuel consumption and plans to adjust its response as it monitors global oil trends. Low-cost carriers, which rely more heavily on passenger revenue than large airlines that can offset losses with air cargo, could see already weak results deteriorate further. Rail operators also face pressure because fares are directly managed by the government, making it difficult to quickly pass higher fuel costs on to customers. Shipping companies are also on alert, focusing on whether higher oil prices will reduce cargo volumes. They can reflect some fuel costs in freight rates through bunker adjustment factors, but if high oil prices weaken global consumption, export and import volumes could fall. Even industries not directly tied to oil face broader cost pressure. Export-heavy sectors such as semiconductors, automobiles and PCs are concerned about higher logistics costs and transport disruptions. If a prolonged war pushes up shipping and airfreight rates enough to be reflected in product prices, demand could weaken. Automakers also expect high oil prices could slightly dampen consumer sentiment for internal combustion vehicles. While hybrids and electric vehicles are taking a larger share, internal combustion models still account for about half of new-car sales in South Korea, making the sector vulnerable. “Rising fuel costs can affect not only corporate expenses across industry but also consumer prices,” an industry official said. “Policy responses are needed to cushion the shock from a sharp rise in energy prices.”* This article has been translated by AI. 2026-03-09 18:13:12 -
Yeocheon NCC Declares Force Majeure as Hormuz Disruption Hits Naphtha Supply U.S. and Israeli airstrikes on Iran have heightened tensions in the Middle East, sending shock waves through South Korea’s petrochemical industry. With disruptions in naphtha feedstock supply after the closure of the Strait of Hormuz, Yeocheon NCC has declared force majeure, raising concerns among domestic companies that rely on its ethylene supplies. Industry officials and foreign media reported on Thursday that Yeocheon NCC notified major customers on March 4 that product deliveries could be delayed or adjusted and declared force majeure after it could no longer secure naphtha due to the Hormuz closure. The move followed a halt in imports of Middle East-origin naphtha, including from Saudi Arabia, amid the impact of Iran’s drone attacks and the strait’s shutdown. Yeocheon NCC is a joint venture of Hanwha Solutions and DL Chemical and is South Korea’s largest single ethylene production hub, with annual capacity of 2.285 million tons. As restructuring continues across the sector, its third plant has been shut down, leaving only Plants 1 and 2 operating. Hanwha Solutions confirmed reports of the force majeure declaration. The company was reported to have told some customers that contract performance could be temporarily delayed or revised due to disruptions in Middle East naphtha supply following the outbreak of war between the United States and Iran. In a letter to customers, Yeocheon NCC said it was declaring force majeure because the Middle East crisis had disrupted feedstock supply. It said it had no choice but to run all production facilities at minimum capacity starting March 4, outlining plans to cut operating rates. “As geopolitical tensions in the Middle East have suddenly and sharply escalated, we are experiencing severe disruptions in raw material procurement,” it said, adding that the Hormuz closure had significantly delayed the arrival of naphtha feedstock scheduled for delivery in March. Naphtha prices have risen more than 20% since the crisis began. Force majeure is a contract clause that can exempt a seller from liability when performance becomes difficult due to events beyond its control, such as natural disasters or war. The declaration is expected to directly affect Hanwha Solutions and DL Chemical, Yeocheon NCC’s major shareholders and key customers. Yeocheon NCC has supplied the two companies with ethylene and other basic feedstocks through pipelines. For ethylene, it supplies 1.4 million tons a year to Hanwha Solutions and 735,000 tons a year to DL Chemical. Analysts said the situation could worsen if the disruption drags on and inventories run down. NICE Credit Rating said that, considering cargoes shipped before late February and existing stockpiles, major domestic naphtha cracking centers appear to have about one month of reserves. It said companies are likely to respond by lowering operating rates, adjusting maintenance schedules and securing alternative sources to manage supply uncertainty.* This article has been translated by AI. 2026-03-06 17:39:29 -
SeAH Steel Profit Plunges 74.3% in 2025 on Impact of High U.S. Tariffs SeAH Steel said its 2025 results deteriorated sharply as high U.S. steel tariffs hit earnings, with operating profit plunging more than 70%. According to SeAH Steel Holdings on Thursday, SeAH Steel’s separate financial statements showed 2025 revenue of 1.3721 trillion won, down 23.2% from a year earlier. Operating profit fell 74.3% to 51.9 billion won, and net profit dropped 68.0% to 41.6 billion won. The company cited high U.S. tariffs as a key driver. With construction slowing and steel demand weakening, the spread of U.S. protectionism increased tariff burdens, sharply hurting both sales volume and profitability. SeAH Steel is heavily exposed to the U.S. market. Exports to the United States account for about 30% to 38% of total revenue, among the highest shares for South Korean steelmakers. The company relies on demand for energy-industry steel pipes such as oil country tubular goods, or OCTG, and pipeline products, selling through its local distribution unit, SSA (SeAH Steel America). That structure increases earnings volatility as U.S. energy investment and trade conditions shift. At the holding-company level, consolidated results were relatively steady. SeAH Steel Holdings posted 2025 consolidated revenue of 3.7596 trillion won, up 2.3% year over year, while operating profit slipped 2.7% to 205.8 billion won. The company said sales from its U.S. unit and overseas projects partly offset weakness in domestic operations. The company said it plans to strengthen a selective order strategy focused on profitability this year and increase the share of high value-added products. A SeAH Steel Holdings official said, “Despite uncertainty in global markets, demand for steel pipes in North America is expected to remain solid,” adding that the company will use its domestic and global manufacturing bases to meet that demand and deliver stable performance.* This article has been translated by AI. 2026-03-06 14:52:27 -
HD Hyundai Chairman Chung Ki-sun visits Philippines to expand economic cooperation Chung Ki-sun, chairman of HD Hyundai, visited the Philippines as part of a South Korean government economic delegation, seeking to deepen ties and expand economic cooperation between the two countries, the company said March 5. HD Hyundai said Chung paid tribute at a Korean War memorial, attended a Korea-Philippines business forum and inspected HD Hyundai Philippines Shipbuilding (HD Hyundai Philippines). On March 4, Chung visited the Korean War memorial at the National Heroes Cemetery in Manila and laid flowers. The Philippines was the first Asian country to organize a combat unit for the war and deployed the largest contingent, sending 7,420 troops, the company said. Earlier that morning, Chung attended the Korea-Philippines Business Forum, co-hosted by the Federation of Korean Industries and the Philippine Chamber of Commerce and Industry, where participants discussed detailed steps to expand bilateral economic cooperation. On March 5, Chung visited HD Hyundai Philippines in Subic Bay, touring a construction site for a new employee dormitory and the yard, and encouraging staff working there. Over lunch with local employees, he said, "I will take even more special care in areas such as housing, medical services and public safety so employees have no inconvenience," and added, "Above all, I ask that you put safety first and do your best in the work you have been entrusted with." HD Hyundai has continued business cooperation with the Philippines. HD Korea Shipbuilding & Offshore Engineering, the intermediate holding company for HD Hyundai's shipbuilding business, signed a lease in May 2024 with U.S.-based Cerberus Capital for part of a Philippine shipyard site and launched HD Hyundai Philippines. In September last year, HD Hyundai Philippines held a steel-cutting ceremony to begin building its first vessel, a 115,000-ton petrochemical product carrier. HD Hyundai Heavy Industries has won orders for a total of 12 naval vessels from the Philippines since 2016, the company said. In 2022, it established a local logistics support center and has been providing maintenance, repair and overhaul services for delivered ships, including frigates and patrol vessels. Chung said, "Beyond a simple business partnership with the Philippines, we have been serving as a key bridge to strengthen friendship between the Republic of Korea and the Philippines," adding, "We will continue to build deep trust with the Philippines with pride in representing Korea."* This article has been translated by AI. 2026-03-05 11:48:20 -
Young Poong to Review KZ Precision Shareholder Proposals, Plans to Put Legal Items to Vote Young Poong said Thursday it will closely review shareholder proposals submitted by KZ Precision, a related party of Korea Zinc Chairman Choi Yun-beom, ahead of its 75th annual general meeting and plans to place on the agenda any items that comply with relevant laws. The company said it has pursued its own governance reforms and shareholder-value measures, contrary to KZ Precision’s claims. It cited last year’s cancellation of 1,030,500 treasury shares, a 10-for-1 stock split aimed at lowering the entry barrier for small investors, and cash and stock dividends totaling 33.6 billion won. Young Poong also said it has reflected shareholder views in management, including appointing Jeon Young-jun as an outside director who serves on the audit committee after accepting a proposal from ordinary shareholders. Young Poong said it will maintain its shareholder-return stance this year. It plans to cancel all remaining 203,500 treasury shares in the first half, further reducing shares outstanding. The company said the move is intended to enhance shareholder value and reinforce its commitment to responsible management. It also said it will draw up a midterm roadmap for its dividend policy to improve predictability for shareholders and further refine its corporate value-up program. Young Poong said it will also accelerate governance-improvement efforts aimed at raising the corporate value of its key asset, Korea Zinc. The company said it believes Korea Zinc under Choi’s leadership continues to face concerns about potential damage to shareholder value, and it will do its utmost to normalize corporate value through sound governance and protect shareholder interests. Young Poong said it is working to strengthen competitiveness by restoring sales and improving profitability in its core smelting business, while continuing environmental investment to build an eco-friendly smelter. It said it will continue to focus on enhancing shareholder value based on responsible management and transparent decision-making. Separately, Young Poong said it filed a damages lawsuit on March 4 against KZ Precision and its Chairman Choi Chang-gyu and CEO Lee Han-seong, alleging they created the appearance of cross-shareholdings during a management control dispute at Korea Zinc and caused significant losses to Young Poong.* This article has been translated by AI. 2026-03-05 09:21:19 -
War Risk Insurance for Hormuz Shipping Seen Surging as U.S.-Iran Tensions Rise U.S. strikes on Iran have heightened tensions in the Middle East, fueling expectations that war risk insurance for ships transiting the Strait of Hormuz could rise sharply. The market is discussing a jump from about 0.01% of a vessel’s value to as high as 2% to 3%. If that happens, costs would spread beyond shipping lines to cargo owners, weighing on South Korean industry more broadly. According to the shipping industry on Tuesday, global reinsurers are reviewing whether to raise reinsurance rates for war risk coverage on vessels passing through the strait. Some observers had speculated that global marine insurers were pulling war risk coverage and halting related reinsurance. Industry sources said the issue is not a suspension but potential increases in reinsurance rates. War risk insurance is an add-on policy, separate from standard liability coverage, that ships typically buy when entering areas where conflict is possible. Premiums are generally calculated as a percentage of a ship’s value. While rates vary by vessel, they are typically about 0.01% in normal times, but can surge when military tensions rise. During last year’s Red Sea crisis, war risk premiums climbed to about 1% of ship value, nearly 100 times the usual level. For ships transiting the Strait of Hormuz, war risk reinsurance rates are currently said to be about 1% of vessel value. Depending on the risk level by port of call, rates could rise to 2% to 3%. For a ship valued at 100 billion won, that would mean up to 3 billion won in additional premiums. Industry officials said the burden would largely fall on shipping companies. While marine insurance contracts are signed directly between carriers and insurers, the terms are heavily influenced by reinsurers’ decisions. The industry expects higher premiums to push up ocean freight costs and, over time, raise crude oil import costs and add to energy price uncertainty. Analysts said countries like South Korea, which rely heavily on imported crude, are especially exposed to swings in transport costs on Middle East routes. President Trump early Tuesday mentioned providing military protection for tankers passing through the Strait of Hormuz and raised the possibility of insurance and guarantee support for energy transport vessels in the Gulf region through the U.S. International Development Finance Corp. Industry officials said the remarks appeared largely political and were unlikely to translate into policy. South Korea’s government is also monitoring the situation and preparing responses. The Ministry of Oceans and Fisheries and other agencies are checking in real time the locations and safety conditions of South Korean-flagged ships operating in Middle Eastern waters, according to industry officials. About 40 South Korean-flagged vessels are believed to be operating near waters around the Strait of Hormuz. They have moved to nearby safer waters as a precaution. Still, anxiety among crews remains significant, sources said. While most sailors are continuing their duties calmly, they are reporting heavy psychological stress amid uncertainty over how long the situation will last. “Given the limits on food and supply replenishment due to the nature of shipping, swift government action and support are needed to relocate vessels in the area,” one industry official said. “If tensions around the Strait of Hormuz drag on, we cannot rule out risks to ship safety and possible disruptions to crude oil transport.” 2026-03-04 18:05:02 -
Hanwha Ocean Says It Can Deliver First Canadian Submarine in 2032, Ahead of German Rival Hanwha Ocean, part of a South Korean consortium with HD Hyundai Heavy Industries, said it has emphasized to Canada the potential for broader industrial cooperation as it competes for the Canadian Patrol Submarine Project, or CPSP. The Canadian Press reported on March 3 (local time) that Hanwha Ocean CEO Eo Seong-cheol said the company and the South Korean government view a submarine contract as the start of a deeper industrial relationship between the two countries. Hanwha Ocean and its consortium partner, along with Germany’s Thyssenkrupp Marine Systems, submitted final proposals to the Canadian government on March 2, the deadline. The bids included delivery schedules and investment plans tied to the contract. Eo told the outlet the deal would be a “major catalyst” for bilateral ties. He said the proposal includes investments across areas such as steel, artificial intelligence and space, and would create an average of 25,000 jobs a year from this year through 2044. Eo said the final proposal calls for delivering the first submarine in 2032 and four boats by 2035, and includes what the company described as a firm price estimate. Shipbuilding industry officials said that timeline is faster and more specific than the German bid, which they said pledged to deliver at least two submarines to Canada by 2034. “Hanwha’s proposal is not just a platform proposal,” Eo said. “It is a proposal that combines a clear and accurate delivery plan with a multigenerational industrial partnership, and it fully aligns with Canada’s defense industrial strategy.” He said Hanwha is also interested in other Canadian contracts and is reviewing cooperation in areas including ground defense programs, electronic and AI technologies, and Arctic-related capabilities. Eo cited partnerships with multiple Canadian companies to jointly carry out submarine-related work if it wins. “We have already built strong relationships with capable Canadian companies, and we will expand these partnerships regardless of the contract outcome,” he said. The Canadian Press also carried an interview with TKMS CEO Oliver Burkhard. Burkhard, referring to comments that Canada’s final selection will weigh how much benefit bidders provide to the Canadian economy and industry, said such demands were driven by the actions of Canada’s “southern neighbor,” and were putting pressure on bidders. On Canada’s desire for expanded manufacturing investment in Canada by South Korean and German automakers, he said it should not be assumed that “if there is no car production, it does not help Canada,” adding that everything should not be treated as if it belongs in one basket.* This article has been translated by AI. 2026-03-04 14:12:20 -
Tanker Charter Rates Double After Iran Strikes, Raising South Korea Energy Security Fears U.S. and Israeli airstrikes on Iran have sent global oil prices surging, and tanker freight rates have more than doubled, raising alarms over South Korea’s energy security. With heavy reliance on Middle Eastern energy, South Korea could face a shock comparable to the 1970s oil crisis if the conflict drags on, industry officials warned. According to the industry on Tuesday, the attacks pushed up international crude prices and natural gas prices in Asia and Europe. On ICE Futures, Brent crude for May delivery settled at $77.74 a barrel, up 6.7% from the previous session. Brent briefly climbed 13% intraday to $82.37, its highest level in more than a year since January last year. On the New York Mercantile Exchange, WTI for April delivery settled at $71.23 a barrel, up 6.3%. WTI also rose as much as 12% intraday to $75.33, the highest since June last year. Shipping costs jumped alongside crude. A VLCC (very large crude carrier) rate indicator for the Middle East-to-East Asia (MEG–China) route obtained by Ajou Economy showed the Worldscale (WS) index at 410.44 as of March 2. The corresponding daily time charter equivalent (TCE) was calculated at $423,736. That was nearly double the level just before the war on Feb. 27 (WS 224.72; TCE $218,154) and more than five times January’s level (WS 96.12; TCE $78,793) in about a month. Worldscale is the standard benchmark used to settle international tanker freight. A reading below 100 is generally seen as weak and above 100 as strong. Against that yardstick, a move above WS 400 is viewed as an extreme level reflecting war risk, not just a strong market. The market is increasingly concerned that tanker freight could rise more than tenfold from prewar levels as Iran’s closure of the Strait of Hormuz has effectively become a reality. Marine insurance, a major component of shipping costs, has continued to climb sharply, the report said. Experts said the fallout for South Korea could be significant because the country depends on the Middle East — where the Strait of Hormuz is located — for about 70% of its imported crude and up to 30% of its natural gas. If higher crude prices are compounded by rising transport costs, refiners’ import costs would jump, likely feeding into higher prices for petroleum and petrochemical products and higher power-generation costs, squeezing profitability across industries. The government plans to respond by releasing stockpiled oil and securing alternative supplies. It says it holds about 208 days’ worth of crude reserves, enough to manage short-term disruptions. But a prolonged closure of the Strait of Hormuz could change the picture. As the war lengthens, releasing reserves alone may not fully ease supply anxiety. The Korea International Trade Association said using detours instead of the strait could lift shipping costs by an additional 50% to 80% from current levels. Transit time and customs procedures could also add up to five days, and in past conflicts in the region, war-risk insurance premiums have been marked up as much as sevenfold. Oh Hyun-seok, a professor of international trade at Keimyung University, said, “The government says it still has room with its stockpiles, but it is not time to be optimistic.” He added, “If the strait is blocked, South Korea needs to diversify oil imports, and in the short term it needs tax adjustments, such as easing fuel taxes, to reduce the burden on companies and consumers.” 2026-03-03 18:03:25 -
HMM Union Threatens April General Strike Over Proposed Move of Headquarters to Busan HMM’s labor dispute over a proposed relocation of its headquarters to Busan is escalating toward a general strike. HMM’s onshore union said Tuesday it will take legal action and launch a general strike in April if the government and major shareholders push ahead with the move without an agreement with labor. In a statement, the union said it believes the government and major shareholders could move to finalize the relocation through a sequence of steps: a March shareholders meeting, an April board meeting and a May extraordinary shareholders meeting to confirm amendments to the company’s articles of incorporation. HMM’s largest shareholders are the Korea Development Bank and the Korea Ocean Business Corp., which hold 35.42% and 35.08%, respectively. To relocate the headquarters to Busan, HMM would need to amend its articles, which currently state the headquarters is in Seoul. The union said major shareholders may appoint three outside directors seen as friendly at the March regular shareholders meeting, then pass a proposal at the April board meeting to amend the articles to change the headquarters location, and finalize it at the May extraordinary shareholders meeting. “If the articles are changed while negotiations are under way, we will pursue legal action against the directors and seek an injunction to suspend the effect of the special resolution at the shareholders meeting or to block the relocation,” the union said. The union also argued the relocation push is politically driven. It said the stated goal of strengthening shipping competitiveness has been sidelined and that the move is being rushed in connection with a political timetable in a specific region. It said shipping companies base headquarters in the Seoul metropolitan area for management efficiency, citing access to information, talent recruitment and global networks, and warned a forced move that ignores industry realities would weaken competitiveness. The union raised job-security concerns, saying the relocation would disrupt the lives of hundreds of employees and their families and, without sufficient consultation and measures, could lead to staff departures and organizational instability. The union said it will begin phased actions. Starting March 11, it plans weekly rallies during commuting hours, followed by a March 26 news conference in front of the headquarters. On April 2, it plans a rally and union assembly to approve a general strike in front of Cheong Wa Dae Sarangchae. It said it is also considering increasing rallies to twice a week or daily depending on developments. “If the government ultimately ignores workers’ right to make a living and the company’s autonomy, we will move into full-scale action including a general strike,” the union said, adding that responsibility for any management disruption and industrial losses would lie with the government. The headquarters issue is being pursued in connection with the government’s plan to develop Busan as a “maritime capital.” With labor-management tensions rising, debate over whether, when and how the relocation would proceed is expected to continue.* This article has been translated by AI. 2026-03-03 14:54:21 -
VLCC Tanker Charter Rates Top $400,000 a Day After Iran War, Data Show U.S. and Israeli strikes on Iran have pushed daily charter rates for very large crude carriers above $400,000, as fears grow that Iran could block shipping through the Strait of Hormuz. Rates that had been in the low $200,000s surged to nearly double in a short period as Iran escalated its threats. Some analysts say rates could climb toward $800,000 a day if a blockade takes hold. According to a Middle East-to-East Asia (MEG-China) VLCC route indicator obtained by Ajunews, the Worldscale (WS) tanker index stood at 410.44 as of March 2. That implies a daily time-charter equivalent, or TCE, of $423,736. That is more than double the WS 224.72 and TCE $218,154 recorded on Feb. 27, just before the outbreak of war between the U.S.-Israel side and Iran, the data showed. In January, the WS index was 96.12 and the TCE was $78,793, meaning rates have risen more than fivefold in about a month. Worldscale is a standard benchmark used to settle international tanker freight, with 100 typically treated as the baseline. A reading above 400 is widely seen as an extreme level reflecting war risk rather than ordinary market strength. Iran said through the semiofficial ISNA news agency that “the Strait of Hormuz has been closed,” warning that “any vessel that attempts to pass will be burned by the Revolutionary Guards and the regular navy.” It added that it would ensure “not a single drop of oil” leaves. Market participants fear tanker freight could jump more than tenfold from prewar levels if the Hormuz route is effectively shut, as marine insurance — a major component of shipping costs — continues to rise sharply. About 20% of the world’s seaborne crude oil passes through the Strait of Hormuz, making it a strategic chokepoint. Some in the market say that if tensions persist, the WS index could approach 800 and daily charter rates could near $800,000. The surge in tanker costs is also adding upward pressure on energy prices in South Korea, which relies heavily on Middle Eastern crude. Higher Middle East-to-East Asia transport costs are likely to raise refiners’ import costs, and, together with rising global oil prices, could lift domestic prices for petroleum and petrochemical products and consumer inflation. A shipping industry official said the strait has not been “physically completely blocked,” but the risk of attack means shipping companies “effectively view it as a blockade.” The official added that WS 400 is “an extreme level beyond market common sense,” and that if war-related uncertainty continues, the shock could spread beyond shipowners to global logistics overall. 2026-03-03 12:03:22