Yeochun NCC Co. (YNCC), the nation's third-largest ethylene producer, operates as a joint venture between DL Chemical and Hanwha Solutions.
The proposal aligns with government encouragement for domestic petrochemical companies to submit plans by year-end aimed at addressing excess capacity and strengthening financial performance.
A report published Sunday by The Korea Economic Daily stated that Hanwha Solutions and DL Chemical had reached an agreement to shut down YNCC's No. 3 cracker, with a capacity of 470,000 tons per year, citing unnamed sources from industry and government circles.
DL Chemical clarified in its Monday statement that it is not currently proposing the closure of the No. 3 unit.
The No. 3 cracker has been idled temporarily since August as a measure to enhance profitability, following three consecutive years of losses reported through 2024.
A spokesperson for Hanwha Solutions indicated via text message that DL Chemical's suggestion to close the No. 1 facility has not yet received agreement from the joint venture partner. The spokesperson described it as one of several options under consideration for YNCC's restructuring.
Hanwha Solutions emphasized that discussions with DL Chemical remain ongoing to improve the joint venture's overall competitiveness.
YNCC itself declined to provide comments regarding the media report.
The developments reflect efforts within South Korea's petrochemical sector to adapt to challenging market conditions, including sustained oversupply and pressure on margins. Structural adjustments, such as capacity rationalization, are viewed as necessary steps to restore sustainable operations for producers facing prolonged difficulties.
Both parent companies continue to evaluate various strategies to support the long-term viability of their shared asset.
