"Price Doubled in 2 Years"... Supply Shortage Sparks 'Carbonated' Crisis, Related Industries Face 'Shutdown' Risk

Domestic Carbonated Beverage Manufacturers Complain of Production Disruptions
Byproduct Carbon Dioxide Supply Shortage Due to Petrochemical Plant Maintenance
Prices Soar to Twice as High... "Government and Industry Must Take Action"

[Image source=Reuters Yonhap News]

[Asia Economy Reporter Kim Jeong-wan] Amid ongoing high oil prices and global supply chain crises, small and medium-sized carbon dioxide industries are also facing increased difficulties due to carbon dioxide supply shortages, urging the government and suppliers to devise countermeasures.

The Korea High-Pressure Gas Industry Cooperative Federation announced on the 12th that following the carbon dioxide shortage caused by COVID-19, domestic carbon dioxide manufacturers are now facing production disruptions due to plant maintenance by petrochemical companies.

In a press release on the same day, the federation stated, "Due to the carbon dioxide shortage, related industries are facing production disruptions," adding, "In Korea, there are carbon dioxide manufacturers such as Taekyung Chemical, Seondo Chemical, Changshin Chemical, Dongkwang Chemical, and SK Materials Reunitec, but currently none of them are able to properly ship carbon dioxide."

The federation estimates the domestic carbon dioxide production capacity at 83,000 tons per month and predicts that production will decrease by 70% to 24,470 tons this month and by 80% to 15,430 tons in June.

According to the federation, carbon dioxide is used not only in food products such as carbonated beverages but also in various industrial sectors including semiconductors, steel, shipbuilding, medical, and wastewater treatment. Carbon dioxide is mainly produced as a byproduct during the refining and petrochemical manufacturing processes. Carbon dioxide manufacturers receive raw carbon dioxide from petrochemical companies, refine and liquefy it, and then supply it to filling companies and large-scale demand companies.

However, as petrochemical companies have successively entered plant maintenance from March to June, the supply of carbon dioxide, a byproduct of petrochemical products, is also becoming insufficient.

Additionally, with the increase in online shopping, cases of receiving food via delivery at home have risen, causing explosive demand for dry ice and resulting in instability in the supply of raw carbon dioxide. Another major cause of this situation is the sharp rise in international oil prices, which has led to the use of natural gas instead of naphtha for hydrogen production, reducing carbon dioxide generation to one-fifth.

In fact, carbon dioxide prices have also soared significantly. Over the past two years, carbon dioxide prices have more than doubled.

Shim Seung-il, chairman of the Korea High-Pressure Gas Industry Cooperative Federation, emphasized, "Carbon dioxide is very important not only in everyday life but also across industries, and the carbon dioxide shortage is expected to have adverse effects on the entire industry," adding, "The government and industry must promptly take measures."

He added, "In particular, petrochemical companies planning plant maintenance in May and June should adjust their maintenance schedules, and distribution and delivery companies should make efforts to protect the industry, such as replacing dry ice with ice packs."