South Korea - Country Commercial Guide
Specialty Chemicals

This is a best prospect industry sector for this country. Includes a market overview and trade data.

Last published date: 2020-09-20

 Overview

                                                                 Unit: USD million

 

2017

2018

2019

2020
(estimated)

Total Market Size

51,016

52,546

54,122

55,746

Total Local Production

44,316

45,645

47,014

43,424

Total Exports

11,384

11,725

12,076

12,438

Total Imports

15,992

16,471

16,965

17,474

Imports from the U.S.

3,422

3,524

3,629

3,738

Exchange Rate: 1 USD

1,131

1,110

1,165

1,196

Data Sources: Korea Specialty Chemical Industry Association

In Korea, demand for high quality, sophisticated chemical products and associated substances for use in product development and production presents a lucrative opportunity for U.S. chemical manufactures. In 2019, the estimated total value of Korea’s specialty chemicals market was USD 54 billion, representing a 3 percent increase over 2018. During the same period, foreign suppliers satisfied approximately 31 percent of Korea’s total demand for raw and intermediate materials and new substances. Specifically, Korea’s imports from the U.S. totaled USD 3.5 billion. The U.S. holds a 21 percent share of the specialty chemical import market. 

Korea’s specialty chemical market has matured by focusing on the development of finished multi-application products such as dyes, paints, and surfactants. The technological level of dyes & pigments from domestic producers appears to be on par with other advanced countries. However, Korea lags in the development of specialty chemicals that require the accumulation of fundamental core technologies developed over a long period of time and with substantial R&D investments. 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 3rd 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, are now more receptive than they have ever been for alternative supplies after Japan’s recent export bans on some raw chemicals. 

U.S. chemical exports receive duty-free treatment under KORUS FTA (US and Korea Free Trade Agreement).  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 a lack of transparency, inconsistency, as well as concerns over the protection of confidential business information.

Sub-Sector Best Prospects

  • Specialty chemicals for the medical and pharmaceutical industries
  • Specialty chemicals for the cosmetics industry
  • Specialty chemicals for the electronics & IT industries

Opportunities

While competition is becoming intense with local and 3rd 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 has seen an increase in demand for functional or high-performance biologically active chemical ingredients to produce zero pollution and environmentally friendly products. 

Resources

Trade Shows

Int’l Coating, Adhesive, and Film Industry Expo 2020 (Annual)
August 5-7, 2020
Songdo Convention Center, Incheon

http://coatingkorea.com/

Key Contact

Ministry of Environment
www.me.go.kr

 

Ministry of Labor
 

National Institute of Environmental Research
www.nier.go.kr

Local Contact

(Ms.) Young Hee Koo
Commercial Specialist
Commercial Service Korea
U.S. Embassy
188 Sejong-daero
, Jongno-gu
Seoul 03141 Korea
Tel: 82-2-397-4
396
Fax: 82-2-739-1628
Email: younghee.koo@trade.gov

https://www.trade.gov/southkorea