LG Chem Considers Exiting PA Business... "As Part of Production Line Consolidation"

[Asia Economy Reporter Hwang Yoon-joo] LG Chem is withdrawing from the PA (phthalic anhydride) business.

An LG Chem official stated on the 21st, "Currently, the PA line is operating normally, but we are considering withdrawal due to market conditions and business feasibility."

PA is mainly used as a raw material for plasticizers (DOP), which are additives that provide flexibility to plastics. It is primarily applied to PVC (polyvinyl chloride) resin. Currently, LG Chem produces PA on one line at its Yeosu Industrial Complex plant, with an annual production capacity of about 50,000 tons.

The main reason for considering withdrawal from the PA business is the aggressive low-price competition from China. Since May 2018, the price spread between PA and its raw material OX (ortho-xylene) has been narrowing. Additionally, environmental hormone issues related to DOP seem to have had an impact.

An LG Chem official explained, "This does not mean shutting down the entire plant, but stopping operation of the single line that produces PA. Such product and production line consolidation and business rationalization are common internal matters."