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

Sungshin Cement Co

10/06/2022 07:17

SEOUL, June 10 (Reuters) - Thousands of South Korean
truckers went on strike for a fourth day on Friday in a protest
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:*:nL1N2XW32R
    Following are some details of the disruption and reactions
from union officials and businesses.
    
    AUTOS 
    Production at Hyundai Motor Co's  005380.KS  biggest factory
complex, in Ulsan, fell by half on Thursday because of component
shortages caused by the strike, a union official at the
automaker said.  urn:newsml:reuters.com:*:nL1N2XW32R
    Hyundai said there was disruption but declined to provide
details. "There are some disruptions in our production due to
the truckers' strike and we hope production would be normalised
as soon as possible," a Hyundai Motor's spokesperson told
Reuters on Friday.
    About 1,000 truckers staged a sit-in strike in front of
Hyundai's Ulsan complex but they did not block vehicles from
going in or out, a Reuters witness said. 
    Kia Corp  000270.KS  employees at its Gwangju plant were
using newly assembled cars to make deliveries, media reported.
        
    BATTERIES 
    "We adjusted some of our shipments beforehand to move them
to the port before the strike just in case we faced issues with
logistics," an official at one of the three major South Korean
battery firms told Reuters.
    The official, who declined to be identified due to the
sensitivity of the matter, said the company had not seen any
disruption this week but would have to reassess its handling of
shipments if the strike continued next week.
    LG Energy Solution (LGES)  373220.KS , SK Innovation's
 096770.KS  battery unit SK On and Samsung SDI Co Ltd
 006400.KS  are South Korea's three biggest EV battery makers.
        
    SEMICONDUCTORS
    The truckers plan to stop shipments of raw materials for
semiconductors that are produced in Ulsan, Park Jeong-tae, a 
truckers union official, told Reuters.
    Samsung Electronics Co  005930.KS  and SK Hynix  000660.KS ,
two of the world's biggest memory chip makers, declined to
comment.
    "We would not likely face production disruption ... in the
short term, considering our inventories of raw materials," an
official at a major tech manufacturing company said, declining
to be identified because the of the sensitivity of the matter.
    
    CEMENT AND STEEL
    Steelmaker POSCO  005490.KS  said on Thursday it had been
unable to ship about 35,000 tonnes of steel products a day from
two plants since the strike began - equivalent to about a third
of its daily shipments from those plants.  urn:newsml:reuters.com:*:nS6N2WI00P
    An executive at a major cement maker said shipments at their
company had stopped entirely for the fourth day on Friday and
there were truckers outside the gate. 
    In addition to raw materials running out, storage at the
factory was also expected to reach capacity, so it would have to
shut soon, the executive said.
    Truckers blocked the entry to the work sites of Hanil Cement
Co Ltd  300720.KS  and Sungshin Cement Co Ltd  004980.KS  in
Chungcheong province, Newsis reported. The two companies plan to
boost shipping by train to minimise the impact, it said.
    
    REFINERS AND PETROCHEMICALS
    The number of vehicles entering an Ulsan petrochemical
complex has been cut to one tenth of normal levels and truckers
would be telling non-union drivers not to enter the complex,
according to truckers' union official Park.
    "Our products like PE/PP (polyethylene and polypropylene)
could suffer from logistics trouble if it gets worse," said a
person familiar with South Korea's petrochemical operations.
    An official at one of the country's major refiners told
Reuters on Thursday it was not seeing much impact on its
shipments and deliveries yet and petrol stations usually had
inventories to cover two weeks.
    "However, the situation could get worse if the strike
continues longer than expected," said the official, who declined
to be identified.
    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
its container traffic was cut to a third of the usual level
because of the strike.
    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 June 7, a government official said.    

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