Welcome to Argus Korea Commodities Insights, your go-to source for the latest developments shaping South Korea’s energy, industrial, and trade sectors. I’m your host, and today we’re diving into the key stories since January 1, 2026. Let’s get started.
Segment 1: Energy Transition and Power Sector
South Korea is pushing forward with its energy transition. A major highlight is the Uljin Nuclear Hydrogen National Industrial Complex, a ₩410.7 billion project aimed at producing “pink” hydrogen using surplus energy from 10 nuclear reactors. Approval applications have been submitted, and construction is slated for March 2028, with completion by June 2033.
However, the hydrogen sector faces headwinds. US firm Plug Power has exited its joint venture with SK Plug Hyverse, citing financial strain and market challenges. Meanwhile, the 2026 budget for hydrogen vehicle deployment has been cut by 20% to ₩576.2 billion, though South Korea exceeded its refueling station targets in 2025 and still aims for over 660 stations by 2030.
On the power front, the country remains committed to phasing out coal by 2040 and boosting renewables to 100GW by 2030. The Taean 1 coal-fired unit was retired on December 31, marking a milestone. At the same time, the Saeul reactor 3 has been cleared for operation, targeting commercial launch in August.
Despite these moves, coal imports rose 4.1% year-on-year in November, driven by Russian supply. Coal-fired generation even increased in October despite government curbs. LNG imports rebounded in December, but gas-fired output stayed low due to flexible coal plant restrictions and nuclear delays. High-CV coal prices have fallen for six straight weeks, and Kospo is seeking up to 1.95 million tonnes of thermal coal for delivery through 2030.
Finally, energy storage is gaining traction. South Korea aims for 2.22GW ESS capacity by 2029, with LG Energy Solution pivoting to domestic LFP battery production.
Segment 2: Industrial Sector and Recycling Initiatives
In petrochemicals, GS Caltex plans to restart its 550,000 t/yr paraxylene unit on January 15, thanks to strong PX-naphtha margins. Gasoline exports surged in January after SK Energy restarted its RFCC unit in Ulsan. Meanwhile, rationalization is underway in the cracker industry, with proposals to cut 2.7–3.7 million t/yr of capacity, though changes won’t materialize before 2027.
On the sustainability front, a new mandate requires beverage manufacturers producing 5,000 tonnes or more to use at least 10% recycled PET. This is expected to boost rPET consumption by 17,500 tonnes annually. Additionally, Korea Zinc is partnering with Alta Resource Technologies to recycle rare earth elements from end-of-life magnets, targeting 100 t/yr capacity by 2027.
Segment 3: Trade and Shipping
Trade tensions are in focus as the US launches anti-dumping and countervailing duty investigations on South Korean hot-rolled coil imports, which totaled 335,040 tonnes over the past year. Meanwhile, the UK is considering removing South Korean plate over 2.5 meters wide from its anti-dumping probe.
In shipping, Hyundai Samho Heavy Industries secured orders for four LNG carriers, while Samsung Heavy Industries landed two LNG carrier contracts. And in agriculture, South Korea purchased 204,000 tonnes of US corn for April-May delivery.
That wraps up Episode 2 of Argus Korea Commodities Insights. Stay tuned for more updates as South Korea navigates its energy transition, industrial shifts, and trade dynamics. For deeper analysis, visit argusmedia.com. Thanks for listening, and see you next time.
