S.Korean LPG importers' profits surge on replacement demand
Seo-Woo Chang
Feb 12, 2023 (Gmt+09:00)
LPG consumption in South Korea soars to its highest-ever level in 2022 South Korea’s liquefied petroleum gas (LPG) importers such as E1 Corp. and SK Gas Ltd. saw their operating profit skyrocket in 2022, as a surge in liquefied natural gas (LNG) prices fueled demand for the cheaper alternative.
Operating profit at E1 shot up 5,000% on-year to 278.7 billion won ($220 million) last year on a consolidated basis, according to its regulatory filing on Feb. 10.
Sales were up 55.1% on-year to 8 trillion won.
SK saw its 2022 operating profit jump 270% to 390.5 billion won, with sales up 24.2% to 8.1 trillion won.
According to the Korea National Oil Corp. (KNOC), LPG consumption in South Korea soared to a record 133 million barrels last year. It was the largest amount since the KNOC started compiling the relevant data in 1997.
LNG prices leapt 411% in 2022, due to lower supply since Russia’s invasion of Ukraine last year.
LPG prices remained stable relative to naphtha, which tracks crude oil prices.
Last year, domestic petrochemical companies bought a total of 67.7 million barrels of LPG, more than three times their purchase of 21.7 million barrels a decade ago.
They accounted for 51% of South Korea’s LPG consumption, after exceeding 50% in 2020 for the first time in their history.
E1's results were attributed in part to profits from overseas trading and strong earnings at LS Networks Corp., a trading company, as well as a low base effect. E1 owns 82% of LS Networks.
Write to Seo-Woo Chang at suwu@hankyung.com Yeonhee Kim edited this article.