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

06/10/2022 | 02:56am EDT
Members of the Cargo Truckers Solidarity union attend a protest in front of Hyundai Motor's factory in Ulsan

SEOUL (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.

Following are some details of the disruption and reactions from union officials and businesses.

AUTOS

Production at Hyundai Motor Co's 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.

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 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), SK Innovation's battery unit SK On and Samsung SDI Co Ltd 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 and SK Hynix, 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 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.

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 and Sungshin Cement Co Ltd 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

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.

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)


© Reuters 2022
Stocks mentioned in the article
ChangeLast1st jan.
HANIL CEMENT CO., LTD. -0.32% 15350 End-of-day quote.-26.90%
HANIL HOLDINGS CO., LTD. 0.00% 11350 End-of-day quote.-15.93%
HITEJINRO CO., LTD. 2.68% 32550 End-of-day quote.7.96%
HYUNDAI CORPORATION 1.16% 17500 End-of-day quote.4.17%
HYUNDAI MOTOR COMPANY 1.55% 196000 End-of-day quote.-6.22%
KIA CORPORATION 1.98% 82400 End-of-day quote.0.24%
LG ENERGY SOLUTION, LTD. -2.44% 460500 End-of-day quote.0.00%
LONDON BRENT OIL 0.30% 93.88 Delayed Quote.25.61%
POSCO HOLDINGS INC. 0.97% 259500 End-of-day quote.-5.46%
S&P GSCI CRUDE OIL INDEX -0.98% 482.1877 Real-time Quote.21.61%
S-OIL CORPORATION 3.44% 90100 End-of-day quote.5.13%
SAMSUNG ELECTRONICS CO., LTD. 0.50% 60200 End-of-day quote.-23.12%
SAMSUNG SDI CO., LTD. 0.65% 623000 End-of-day quote.-4.89%
SK HYNIX INC. 0.00% 93300 End-of-day quote.-28.78%
SK INNOVATION CO., LTD. 0.50% 199500 End-of-day quote.-16.35%
SUNGSHIN CEMENT CO., LTD 0.47% 10650 End-of-day quote.-35.65%
WTI 0.35% 88.413 Delayed Quote.21.92%
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