FACTBOX-Impact of strike by South Korean truckers on autos, steel, others

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.


Reuters | Updated: 13-06-2022 07:38 IST | Created: 13-06-2022 07:38 IST
FACTBOX-Impact of strike by South Korean truckers on autos, steel, others

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.

Following are details of the disruption, lost production and reactions from union officials and businesses. AUTOS

Production at Hyundai Motor Co's 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. 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 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, supplier to major automakers such as Volkswagen AG and Mercedes-Benz Group AG, has seen daily shipments fall to about 50% of usual, a spokesperson said.

BATTERIES LG Energy Solution Ltd, SK Innovation Co Ltd's battery unit SK On and Samsung SDI Co Ltd 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 and SK Hynix Inc , 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 said the strike had halted shipments from two plants by about one-third, or 35,000 tonnes a day. 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 and Sungshin Cement Co Ltd 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 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. 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)

(This story has not been edited by Devdiscourse staff and is auto-generated from a syndicated feed.)

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