South Korea's 14 Major Petrochemical Firms See No Credit Rating Upgrades in H1 2026, Three Downgraded

According to credit rating agencies, in H1 2026 regular assessments, none of the 14 major South Korean petrochemical companies received credit rating upgrades, marking a comprehensive failure in credit recovery. LG Chem's rating fell from AA+ to AA, while Yeochen NCC dropped from A- to BBB+, and SK Advanced Chemical declined from BBB+ to BBB. Lotte Chemical's rating remained unchanged but its outlook shifted from stable to negative.

The downgradings reflect disadvantages in raw material procurement compared to competitors in the U.S., China, and Middle East. South Korean firms rely on naphtha crackers to produce ethylene, while U.S. competitors use cheaper ethane from shale gas, and China increasingly deploys coal-based crackers. On July 22, South Korea's Ministry of Trade, Industry and Energy approved a restructuring project involving Yeochen NCC, Lotte Chemical, Hanwha Q Cells, and DL Chemical to ease financial burdens through asset contribution and merger arrangements.