Prosecutors Raid 7 Petrochemical Firms Over Alleged PVC Price Collusion Amid War

Prior Price Arrangements Over Several Years: Suspected Violation of the Fair Trade Act
Fair Trade Commission Detected Collusion in May and Launched On-site Investigation

Prosecutors have launched a compulsory investigation into domestic petrochemical companies on suspicion of collusion involving polyvinyl chloride (PVC), plasticizers, and other products, taking advantage of the Middle East war.

Na Hee-seok, Chief Prosecutor of the Fair Trade Investigation Division at Seoul Central District Prosecutors' Office. Photo by Yonhap News Agency

According to legal sources on August 5, the Fair Trade Investigation Division of the Seoul Central District Prosecutors Office, led by Chief Prosecutor Nahisuk Na, conducted a raid on seven companies that morning: LG Chem, Hanwha Solutions, AK ChemTech, OCI, Lotte Fine Chemical, PKC, and UNID, securing related materials.

These companies are accused of violating the Fair Trade Act by colluding on the prices of a total of eight petrochemical products, including PVC, plasticizers, caustic soda, and hydrochloric acid, over several years.

Prosecutors suspect the companies prearranged price hikes for petrochemical products after the supply of naphtha, a primary raw material, became unstable due to the war in the Middle East.

PVC is a synthetic plastic produced mainly from naphtha and is widely used in building materials, pipes, and cable insulation. Plasticizers are chemical additives that make PVC soft and flexible.

The Fair Trade Commission also reportedly detected signs of price collusion among petrochemical companies and launched an on-site investigation in May.

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