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

Hanil Holdings Co

13/06/2022 03:07

(Adds comments from cement, petrochemical associations,
companies)
    June 13 (Reuters) - Thousands of South Korean truckers were
on strike for the seventh day on Monday, 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's Ulsan factories make about 6,000 vehicles daily,
the union said. The strike had cost the automaker 4,000 to 5,000
vehicles as of Friday - worth up to 235 billion won ($182.65
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.
    Some employees at Kia Corp  000270.KS  were using newly
assembled cars to make deliveries, customers told Reuters. A Kia
spokesperson was not immediately available for comment. 
    Hankook Tire & Technology Co Ltd  161390.KS , supplier to
major automakers such as Volkswagen AG  VOWG_p.DE  and
Mercedes-Benz Group AG  MBGn.DE , has seen daily shipments fall
to about 50% of usual, a spokesperson said. 
        
    BATTERIES 
    LG Energy Solution Ltd  373220.KS , SK Innovation Co Ltd's
 096770.KS  battery unit SK On and Samsung SDI Co Ltd
 006400.KS  together command more than one-fourth of the global
electric vehicle battery market. 
    One battery maker made shipments before the strike as a
precaution, said an official at the maker who declined to be
identified. 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 Ltd  005930.KS  and SK Hynix Inc
 000660.KS , two of the world's biggest memory chip makers,
declined to comment.
    One major tech manufacturer does not expect near-term
disruptions given its inventories of raw materials, said an
official at the manufacturer on condition of anonymity.
    
    CEMENT, STEEL
    Steelmaker POSCO Holdings Inc  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, while raw materials
were running out and storage was about to hit capacity, an
executive at the cement maker said. 
    Truckers blocked the entry to work sites of Hanil Cement Co
Ltd  300720.KS  and Sungshin Cement Co Ltd  004980.KS  in
Chungcheong province, news agency Newsis reported. The companies
plan to boost shipping by train to minimise the impact, it said.
    A Hanil spokesperson declined to comment on the block, but
confirmed that the company is utilising trains to carry cement
material part of the way. Its final manufacturing process for
cement has stopped due to lack of storage room, he said.
    A Sungshin spokesperson could not be immediately reached.
    An official at the Korea Cement Association told Reuters on
Sunday that about 90% of cement is not being transported from
plants of the association's members due to the strike.
    The Korea Cement Association estimated daily revenue losses
of about 15 billion won for the country's cement industry since
the beginning of the strike last Tuesday. As of Friday,
estimated accumulated revenue loss for cement companies is at
about 60 billion won. 
    
    REFINERS, PETROCHEMICALS
    S.Korea's average daily shipments of petrochemical products
have been slashed to 10% of the usual 74,000 metric tonnes since
the strike, the Korea Petrochemical Industry Association said on
Monday. 
    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.
    One 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, an official at the refiner 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
    Police have made more than two dozen arrests including
members of the truckers union for blocking the HiteJinro Co Ltd
 000080.KS  brewery in Icheon southeast of Seoul, Yonhap news
reported.
    A HiteJinro spokesperson declined comment on the arrests,
but confirmed that members of the truckers union were blocking
entry to both its Icheon and Cheongju breweries, making
logistics difficult and reducing shipments to 60% of usual as of
Sunday. 
     
    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 = 1,286.6200 won)

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