Overview

(Total market size = (total local production+imports)-exports)

Units: $ millions

Data Sources:  Industrial Statistics Analysis System, Ministry of Trade, Industry and Energy

Korea’s chemistry industry has been rapidly developing and the country is ranked at the world’s 5th production scale in 2020. Still the demands for high quality, sophisticated chemical products and associated substances production presents a lucrative opportunity to the U.S. chemical manufactures. In 2021, with the rise in export unit prices from the rise in international oil prices, overall economic recovery led to an increase in exports by 54.4% year-on-year. Korea’s exports of PP, LDPE, PC, and SBR has increased as major importing countries such as the EU, China, and ASEAN countries increased demand for automobiles, displays, and home appliances. In addition, exports to emerging markets also increased from high demands for packaging, construction, and plastic materials from India, Latin American and CIS nations.

Korea’s specialty chemical market is facing new issues from China’s unreliable energy supply, environmental safety controls, and lack of original technologies.  The technological level of dyes & pigments from domestic producers appears to be on par with other advanced countries, but it lags in the development of specialty chemicals that require the accumulation of fundamental core technologies acquired by substantial R&D investments and time. As a result, market demand for sophisticated specialty chemicals present opportunities for foreign importers. 

Korea imports raw materials to process and re-export them to third countries. Imported chemicals are essential in the production of some of Korea’s top exports, which include: semiconductors, electronics, wireless communication equipment, flat display, computers, automobile/auto parts, ships, plastics, and petrochemicals. Korean manufacturers have long been conservative in changing supply channels that often require the modification of the production process. However, Korean manufacturers, especially for electronic and semi-conductor sectors have been diversifying suppliers, as well as investing substantially in domestic technologies after Japan’s export bans in 2019 on raw chemicals for semiconductor production.

U.S. chemical exports receive duty-free benefits under the Free Trade Agreement between the U.S. and Korea.  Korea’s regulatory environment, however, presents challenges to U.S. companies in terms of significant administrative and technical burdens that translate into an overall increased cost of doing business. The other most frequently raised regulatory issues have been concerns over the protection of confidential business information in accordance with Act on Registration and Evaluation, etc. of Chemical Substances in Korea (also known as K-REACH). The foreign manufacturer who intends to export chemicals to Korea should comply with pre-notification and registration in accordance with Act on Registration and Evaluation of Chemical Substances.

Sub-Sector Best Prospects

• Specialty chemicals for the medical and pharmaceutical industries
• Specialty chemicals for the cosmetics industry
• Specialty chemicals for the Information communication technology (Semiconductor/Display)

Opportunities

While competition is becoming intense with local and third country suppliers, there is strong demand for highly innovative materials from the U.S. Korea has been a proven market for U.S. raw and intermediate chemicals used to produce finished pharmaceutical, cosmetic, and surfactant products. Recently, high molecular new materials and chemical ingredients for electronics & IT and biologically active materials are in high demand as Korea’s relevant end-use sectors increase. Additionally, the market is focused on high-value fine chemical technology including automobile, aerospace, electrical & electronics, and high-tech medical devices. 

Resources

Trade Shows

1. Chemical Manufacturing Expo Korea (March 22-24, 2023)

International Coating, Adhesive, and Film Industry Expo

International Hi-Tech Surface & Painting Expo

International Chemical & Bio Equipment Expo

2. International Exhibition for Chemical Processing, Fine & Specialty Chemicals (June 14-17, 2022)
3. Cosmetic Ingredient & Technology Exhibition (June 14-17, 2022)

Key Contacts

• Ministry of Environment.
• National Institute of Environmental Research.

Local Contact

U.S. Commercial Service Korea   
U.S. Embassy Seoul
188 Sejong-daero, Jongro-gu
Seoul 03141, Korea
Tel: 82-2-397-4535
office.seoul@trade.gov

https://www.trade.gov/south-korea