Risks to cars, computer chips and steel shipments as South Korean truckers’ strike drags on

Thousands of South Korean truckers went on strike for a sixth day on Sunday, protesting pay amid soaring fuel costs, halting production, slowing port operations and creating new risks for a strained global supply chain.

Production at Hyundai Motor Co.’s largest factory complex in Ulsan fell to about 60 percent on Friday due to part shortages caused by the strike, a union official at the automaker said.

The plants ran over the weekend for extra runs to clear backorders. Hyundai said there had been a disruption but declined to share details and expressed hope of returning to normal as soon as possible.

Hyundai Motor’s factories in Ulsan produce about 6,000 vehicles a day, according to the union. The strike had cost the automaker 4,000 to 5,000 vehicles by Friday – worth up to 235 billion won (171 million euros).

Several hundred truckers held a weekend sit-in outside Hyundai’s Ulsan complex but did not prevent vehicles from entering or exiting, a Reuters witness said.

Media reported that employees at Kia’s Gwangju plant used newly assembled cars for deliveries.

BATTERIES

LG Energy Solution, SK On, the battery division of SK Innovation, and Samsung SDI Co. together control more than a quarter of the global electric vehicle battery market.

One of the three made deliveries before the strike as a precaution, a company employee said. The company did not experience any disruption last week but will reassess its handling of deliveries if the strike continues, the official said.

SEMICONDUCTOR

The truckers plan to halt shipments of raw materials for semiconductors made in Ulsan, union official Park Jeong-tae said.

Samsung Electronics Co and SK Hynix, two of the world’s largest memory chip makers, declined to comment.

A major tech maker doesn’t expect near-term disruptions given its raw material stockpiles, an official said.

CEMENT, STEEL

Steelmaker POSCO said the strike halted shipments from two plants by about a third, or 35,000 tons a day.

A major cement maker had halted shipments for four days on Friday as truckers were at the gate, raw materials were running low and storage capacity was soon to be reached, an executive said.

According to Newsis, truck drivers blocked the entrance to the Hanil Cement Co and Sungshin Cement Co construction sites in Chungcheong province. The companies plan to increase rail shipments to minimize the impact, it said.

REFINERS, PETROCHEMICAL

The number of vehicles entering a petrochemical complex in Ulsan is down about 90 percent from normal levels, and truck drivers would tell non-union drivers not to enter the complex, the truck union’s Park said.

The strike is threatening logistics for polyethylene and polypropylene, said a person familiar with South Korea’s petrochemical operations.

A major refiner had not seen a major impact on shipments and supplies as of Thursday, and gas stations normally had stocks for two weeks, but the situation would worsen if the strike were extended, a company official said.

South Korea has the fifth largest refining capacity in the world, having 3.3 million barrels per day of crude oil distillation refining capacity as of early 2020.

HITE JINRO

Police have made more than two dozen arrests, including members of the truckers’ union, for blocking the Hite Jinro brewery in Icheon, southeast of Seoul, Yonhap News reported.

PORTS AND CONTAINERS

Busan Port, the world’s seventh-busiest container port, said the strike reduced its container traffic by two-thirds from normal levels.

Container yards are filling up and authorities are discussing measures to secure more, a government official said.

The movement of containers at the port of Ulsan, which accounts for about 10 percent of South Korea’s port traffic, has been suspended since Tuesday, a government official said.

https://www.independent.ie/business/world/risks-to-car-computer-chip-steel-supplies-as-south-korea-truckers-strike-drags-on-41744646.html Risks to cars, computer chips and steel shipments as South Korean truckers’ strike drags on

Fry Electronics Team

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