Factbox: Impact of strike by South Korean truckers on autos, steel, others

Hanil Holdings Co

12/06/2022 11:50

June 12 (Reuters) - Thousands of South Korean truckers were
on strike for a sixth day on Sunday, protesting over pay as fuel
costs surge, disrupting production, slowing port operations and
posing new risks to a strained global supply chain.  urn:newsml:reuters.com:*:nL1N2XZ01N
    Following are details of the disruption, lost production and
reactions from union officials and businesses.
    
    AUTOS 
    Production at Hyundai Motor Co's  005380.KS  biggest factory
complex, in Ulsan, fell to about 60% on Friday because of
component shortages caused by the strike, a union official at
the automaker said.  urn:newsml:reuters.com:*:nL1N2XW32R
    The plants operated for extra runs over the weekend to clear
backorders. Hyundai said there was disruption but declined to
provide details and expressed hope of returning to normal  as
soon as possible.
    Hyundai Motor’s Ulsan factories make about 6,000 vehicles
daily, the union says. The strike had cost the automaker 4,000
to 5,000 vehicles as of Friday - worth up to 235 billion won
($180 million).
    Several hundred truckers staged a weekend sit-in outside
Hyundai's Ulsan complex but did not block vehicles from going in
or out, a Reuters witness said.
    Employees at Kia Corp's  000270.KS  Gwangju plant were using
newly assembled cars to make deliveries, media reported.
        
    BATTERIES 
    LG Energy Solution  373220.KS , SK Innovation's  096770.KS 
battery unit SK On and Samsung SDI Co  006400.KS  together
command more than one-fourth of the global electric vehicle
battery market. 
    One of the three made shipments before the strike as a
precaution, a company official said. The firm did not experience
disruptions last week but will reassess its handling of
shipments if the strike continues, the official said.
        
    SEMICONDUCTORS
    The truckers plan to stop shipments of raw materials for
semiconductors produced in Ulsan, said union official Park
Jeong-tae.
    Samsung Electronics Co  005930.KS  and SK Hynix  000660.KS ,
two of the world's biggest memory chip makers, declined to
comment.
    A major tech manufacturer does not expect near-term
disruptions given its inventories of raw materials, an official
said.
    
    CEMENT, STEEL
    Steelmaker POSCO  005490.KS  said the strike had halted
shipments from two plants by about one-third, or 35,000 tonnes a
day.  urn:newsml:reuters.com:*:nS6N2WI00P
    A major cement maker had stopped shipping for four days as
of Friday with truckers outside the gate, raw materials were
running out and storage was about to hit capacity, an executive
said. 
    Truckers blocked the entry to the work sites of Hanil Cement
Co  300720.KS  and Sungshin Cement Co  004980.KS  in Chungcheong
province, Newsis reported. The companies plan to boost shipping
by train to minimise the impact, it said.
    
    REFINERS, PETROCHEMICALS
    The number of vehicles entering an Ulsan petrochemical
complex has fallen some 90% from normal levels and truckers
would be telling non-union drivers not to enter the complex,
said Park from the truckers union.
    The strike threatens logistics for polyethylene and
polypropylene, said a person familiar with South Korea's
petrochemical operations.
    A major refiner had not seen much impact on shipments and
deliveries as of Thursday, and petrol stations usually had
inventories to cover two weeks, but the situation would worsen
if the strike were prolonged, a company official said.
    South Korea has the world's fifth-largest refining capacity
and had 3.3 million barrels per day of crude oil distillation
refining capacity at the beginning of 2020.

    HITE JINRO  00080.KS 
    Police have made more than two dozen arrests including
members of the truckers union for blocking the Hite Jinro
brewery in Icheon southeast of Seoul, Yonhap news reported. 
     
    PORTS AND CONTAINERS
    Busan Port, the world's seventh-biggest container port, said
the strike had cut its container traffic by two-thirds from
normal levels.
    Container storage sites are filling up and authorities are
discussing measures to secure more, a government official said.
 urn:newsml:reuters.com:*:nS6N2WR00K
    The movement of containers at Ulsan port, which accounts for
about 10% of South Korea's port traffic, has been suspended
since Tuesday, a government official said.
  ($1 = 1,279.3200 won)

 (Reporting by Seoul bureau; Editing by Robert Birsel and
William Mallard)
 ((Byungwook.Kim@thomsonreuters.com;))