U.S. becomes largest naphtha exporter to South Korea after Iran conflict

SEOUL, April 30 (Yonhap) -- The United States has become the largest exporter of naphtha to South Korea following the outbreak of the Iran conflict, the industry ministry said Thursday. South Korea currently imports the biggest share, or 24.7 percent, of naphtha from the U.S., with imports from India, Algeria, the United Arab Emirates (UAE) and Greece following at 23.2 percent, 14.5 percent, 10.2 percent and 4.5 percent, respectively, according to the Ministry of Trade, Industry and Resources. Before the war between the U.S. and Iran broke out in late February, the U.S. ranked seventh in terms of South Korea's naphtha imports, with the UAE in the top spot, Algeria at No. 2, Qatar at No. 3, Kuwait at No. 4 and India at No. 5. "The U.S. has emerged as the largest import source because it was easier to secure supplies from the country in terms of availability," Yang Ghi-wuk, deputy minister for trade, industry and resource security, said in a regular briefing on South Korea's energy supply. Asked whether this signals a fundamental shift in Korea's naphtha supply chain, Yang took a cautious stance, saying it is still too early to determine a structural change as the naphtha market is highly sensitive to prices. Yang said domestic supplies of naphtha, an industrial feedstock widely used across the petrochemical and other industries, will likely stabilize next month in light of continued efforts for import diversification and policy support measures. South Korea is expected to secure up to 90 percent of its pre-Iran war naphtha supplies for May, with major petrochemical companies here expanding their plant operations in line with inbound supplies, according to the ministry. "The equivalent volume of naphtha contracts signed over the entire month of March was matched within just half a month in April," Yang said, adding that Seoul has also been importing a significant amount of basic petrochemical feedstock from China.