Lotte Chemical's basic-chemicals unit will post an operating loss this quarter.

Made

5 Oct 2026

Owen Bae

Market

South Korea

Outcome

Unresolved

G7 leaders agreed on coordinated emergency oil stock releases on October 2nd. These ease supply for crude but not refined products, because China has halted October fuel product exports and Russia's diesel export ban continues, creating a supply gap the G7 is unable to solve. Lotte is exposed because its basic-chemicals unit made almost no profit in Q2. It earned KRW 2.3 billion on KRW 3.94 trillion of sales – that is a margin of 0.1%. Net debt of KRW 7.9 trillion and negative rating outlooks leave no cushion. Q2 profit leaned on cheap pre-Iran war naphtha and government aid, which have faded away. Lotte is likely to lose margin to Chinese coal-based olefin makers, whose costs run over a third lower.

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