South Korea's Yeochun NCC first to declare force majeure amid Hormuz crisis

South Korea’s dominant ethylene hub, Yeochun NCC, became the first to declare force majeure as the Hormuz Strait crisis persists, with major petrochemical players Lotte Chemical, LG Chem, and Hanwha Solutions warning they may invoke the same clause if supplies fail to materialize.

Hanwha Solutions told customers in a formal notice that, given ongoing global energy and logistics uncertainty, a force majeure situation could arise. The company cautioned that some products, including polyolefin families, could face supply disruptions; it stressed that it has not yet declared force majeure, but has informed clients in advance of potential risks.

Lotte Chemical and LG Chem followed with notices noting the possibility of force majeure for certain products. The industry-wide concern follows Yeochun NCC’s initial declaration, prompting other Korean firms to publicly flag the risk of non-performance.

Industry observers say the warnings reflect a broader systemic risk rather than isolated incidents. The sector has been restructuring since last year, consolidating facilities and cutting production, which has left inventories lean and exposed to external shocks.

In Korea, about half of domestic naptha supply is imported, with the remainder produced from domestic crude. Roughly half of imported crude passes through the Hormuz Strait, and around 70% of domestically refined crude is of Middle Eastern origin. A prolonged disruption at Hormuz would therefore affect both imported feedstocks and locally produced crude inputs.

Some analysts warn that if tensions persist, actual plant shutdowns could follow a sustained supply squeeze. The recent wave of force majeure risk disclosures is unusual, and extended disruptions could push some production lines toward idle operation.

For U.S. audiences, the developments matter because Korea is a major global supplier of polymers and petrochemicals, supplying materials used in plastics, packaging, electronics, and automotive components. Any sustained disruption to Korean feedstocks and production could influence global supply chains, prices, and downstream markets in the United States, as well as broader energy-security considerations tied to Middle East crude flows.