South Korean truck drivers are dissatisfied with the high oil price and have launched a strike. It has been more than a week so far, port transportation and import and export trade have been in chaos, and industries such as automobiles, steel, petrochemicals, cement, and batteries have been disrupted. The South Korean government estimates that the strike will cause at least 1.6 trillion.won ($1.2 billion) in economic damage, South Korea might also become the epicentre of a storm that might trigger a new wave of global supply chain crises.
●Why are truck drivers on strike?
From last Tuesday (June 7), 22,000 members of the South Korean truck drivers’ Solidarity union, led by the South Korean Federation of Trade Unions, went on strike to demand that the government extend the fuel subsidy that expired this year to ensure that fuel prices rise as fuel prices rise. , the minimum wage that can be earned.
But Yin Xiyue’s government said it would be up to Congress to amend the law. Markets are expecting an intensification of strike action this week as talks between unions and the government failed to progress over the weekend.
●Reduction and suspension of production in the automobile industry
The strike by truckers has made it difficult for the auto industry to get parts and get finished products out.The incident has caused the South Korean auto industry to cut production by regarding 5,400 vehicles, with a total loss of 257 billion as of last Saturday.won。
Hyundai Motor has cut production at some production lines.According to information provided by the labor union, Hyundai Motor’s Ulsan plant can produce regarding 6,000 vehicles a day. As of last Friday, the strike had cut Hyundai’s production by 3,800 vehicles, equivalent to a loss of 120 billion yuan.won. According to information provided by customers, Hyundai and some of its Hyundai employees are now delivering newly assembled cars instead.
Tire shipments have also been hit hard. Hankook Tire & Technology, a supplier to major automakers such as Volkswagen and Mercedes, said that the strike caused one-day shipments to plummet by regarding 50%. The largest and seventh largest tire manufacturer in the world.
South Korea’s official estimate is that as of Sunday, there were 640,000 South Koreans worth a total of 57 billionwontires cannot be delivered smoothly.
●Semiconductor
South Korea is the world’s largest exporter of memory chips, and disruptions in deliveries and factory shutdowns might have knock-on effects around the world.
The strike is said to have affected Samsung Electronics’ chip production in China. The Korea International Trade Association (KITA) said on Tuesday that a South Korean company that makes isopropyl alcohol (IPA, a raw material for cleaning wafers) has encountered resistance to shipments to a Chinese company that supplies wafers to Samsung’s Chinese factories . Samsung’s factory in Xi’an produces NAND flash memory chips.
Neither Samsung nor SK Hynix commented on the news of the strike.
●Car battery
Sources revealed that a South Korean battery manufacturer had shipped first before the strike, so it was not affected last week, but if the strike continues, it will inevitably affect shipments.
South Korea is an important export center for automotive batteries. LG Energy Solutions (LGES), SK On under SK Group, and Samsung SDI under Samsung Pad, together account for more than a quarter of the world’s electric vehicle batteries.
●Petrochemical
According to the Korea Petrochemical Industry Association, which represents 32 petrochemical companies, South Korea’s daily shipments of petrochemicals are regarding 74,000 metric tons, and shipments fell to 10 percent of their original level following truck drivers went on strike. The association called for an end to the strike, saying “losses are snowballing” and will affect the national economy.
Sources said many petrochemicals were hoping that shipments would resume due to rising inventories.
●Steel, cement
POSCO said some steel plants in the city of Pohang began to temporarily suspend production on Monday as the finished product piled up and had nowhere to put it, estimated to be regarding 450,000 tons worth 698 billion yuan, as a result of a strike by truckers.wonof steel products might not be shipped as scheduled.
The Korea Cement Association estimates that starting from the 7th, the cement industry will lose regarding 15 billion yuan per day.wonrevenue.
● Ports and import and export trade paralyzed
The strike has paralyzed the transportation of South Korea’s main ports. According to statistics from the South Korean Ministry of Land, Infrastructure and Transport as of Monday, the volume of containers to and from 12 ports across the country fell by 68% compared with the average level in May. The spillover effect is emerging, the largest in South Korea and the seventh largest in the world. Inbound and outbound cargo volumes at the port of Busan were also halved from the average.
● the next paralysis of coal-fired power generation?
South Korean trade union officials revealed Monday that they are considering blocking truck drivers from delivering coal to a power plant in Gunsan, North Jeolla Province. Media analysis, although this has a limited impact on electricity, highlights that strike action will escalate.
