Factbox-Impact of strike by South Korean truckers on autos, steel, others -Breaking
(Reuters) – South Korean truckers went on strike again Sunday for the sixth time, protesting rising fuel prices. They disrupted production and slow port operations, causing new problems in a stretched global supply chain.
Here are some details on the disruption and lost production, as well as reactions of union officials and business representatives.
According to a union official, the striking strike caused production at Hyundai Motor Company’s largest factory in Ulsan to drop to 60%.
To clear backorders, the plants were open for additional runs on Saturday. Hyundai acknowledged that there were disruptions, but did not provide any details. However, they expressed their hope for a return to normal soon.
Hyundai Motor’s Ulsan factories make about 6,000 vehicles daily, the union says. As of Friday, the strike cost Hyundai Motors 4,000-5,000 vehicles. This is worth up to 235 Billion won ($180 Million).
According to Reuters, several hundred truckers held a sit-in at Hyundai’s Ulsan compound for a weekend. However they did not prevent vehicles from entering or exiting the area.
Media reported that employees at Kia Corp’s Gwangju facility were using new cars for deliveries.
LG Energy Solution, SK Innovation’s battery unit SK On (KS:), and Samsung (KS-) SDI Co command more than one fourth of the global electric car battery market.
Officials from the company said that one of them made the shipments prior to the strike, as a precaution. Officials said that the firm experienced no disruptions during the strike last week, but would reevaluate its handling of the shipments should it continue.
Park Jeongtae, union official, stated that truckers intend to stop the shipment of raw materials used in semiconductor production in Ulsan.
Samsung Electronics (OTC 🙂 Co and SK Hynix were two of the largest memory chip manufacturers in the world, but declined to comment.
According to an official, a large tech firm does not foresee any near-term disruptions due its stock of raw material.
Steelmaker POSCO (NYSE:) The strike had stopped shipments to two plants for about one third, which is 35,000 tonnes per day.
An executive stated that a major cement manufacturer had stopped shipping since Friday. Truckers were outside the gate and raw materials ran out. Storage was nearing capacity.
Newsis reports that truckers prevented access to Hanil Cement Co’s and Sungshin Cement Co’s worksite in Chungcheong. It said that the companies planned to increase shipping via train in order to minimize their impact.
Park of the truckers union stated that 90% less vehicles have entered the Ulsan Petrochemical Complex than normal. He said truckers would tell drivers who are not members to avoid the complex.
A person who is familiar with South Korea’s petroleum operations said that the strike would threaten logistics for both polyethylene and propylene.
According to a company official, there had been no significant impact on the shipments or deliveries of a major refiner as of Thursday. As usual, gasoline stations had stocks that covered two weeks. But, an extended strike could lead to worsening conditions, according to a company official.
South Korea is the fifth largest refiner in the world and has 3.3 million barrels of distillation refining capability per day as of the start of 2020.
Yonhap news reports that police have arrested more than twenty-six people, including truckers union members, for blocking Hite Jinro’s brewery in Icheon south of Seoul.
CONTENERS AND PORTS
Busan Port is the seventh largest container port in the world. It claimed that the strike reduced its container traffic by nearly two-thirds compared to normal.
A government official stated that containers storage facilities are full and they are being discussed by authorities to find more.
A government official stated that the movement of containers at Ulsan port has been stopped since Tuesday. This port accounts for approximately 10% of South Korea’s ports traffic.
($1 = 1,279.3200 won)