LOTTE Chemical reported an operating loss of KRW 281.4 billion on consolidated revenue of KRW 5.3951 trillion in the third quarter of 2026, as mounting geopolitical risks, volatile feedstock and product prices, and rising ocean freight costs intensified pressure on its business.

 

The company attributed the quarterly loss to continued instability in the Middle East, which drove significant price volatility across feedstocks and chemical products, while higher shipping costs further squeezed margins.

 

Against this challenging backdrop, LOTTE Chemical is accelerating a sweeping business restructuring programme aimed at strengthening competitiveness, improving profitability and reducing its exposure to market volatility.

 

LOTTE Chemical stated, “Amid uncertainties in the domestic and global business environment, we will proactively restructure our businesses to strengthen competitiveness and resilience to market volatility, while establishing a stable earnings base by transforming our business portfolio toward high-value-added products.”

 

The strategy centres on restructuring its basic chemicals operations while expanding higher-margin, high-value-added businesses to create a more resilient earnings base.

 

At its Daesan site, the integrated joint venture H&L Advanced was officially launched in September. LOTTE Chemical is now concentrating on establishing a stable integrated operating system and unlocking operational synergies.

 

The company is also pushing ahead with the restructuring of its Yeosu operations. Following the planned spin-off of the Yeosu plant, LOTTE Chemical intends to establish an integrated entity with Yeochun NCC in the first half of 2027. Discussions with partners on the details of the restructuring are currently under way.

 

The proposed integration is expected to improve operational efficiency, increase the proportion of high-value-added products and lay the groundwork for a structural recovery in the profitability of the basic chemicals business.

 

LOTTE Chemical is simultaneously expanding its advanced materials capabilities. All production lines at its Yulchon compounding plant began operations in September, establishing Korea’s largest single-site compounding production system, with an annual capacity of 500,000 tonnes.

 

An additional dedicated production line for high-value-added products is scheduled to start operations in the first quarter of 2027, further strengthening the company's specialty materials portfolio.

 

The Basic Chemicals business, comprising LOTTE Chemical's Basic Materials business, LC Titan, LC USA and LOTTE Daesan Petrochemical for July and August, recorded revenue of KRW 3.7235 trillion and an operating loss of KRW 216.6 billion.

 

Profitability deteriorated amid reverse-lag effects from falling feedstock prices, narrowing product spreads and an unfavourable exchange rate.

 

The outlook remains challenging, with persistent global oversupply and a delayed recovery in demand expected to keep market conditions weak. LOTTE Chemical plans to counter the pressure through production optimisation and measures to strengthen business competitiveness.

 

The Advanced Materials business posted revenue of KRW 1.0893 trillion and an operating loss of KRW 15.4 billion.

 

Narrower spreads for key products and adverse exchange-rate movements weighed on profitability. While currency pressures and elevated freight costs are expected to persist, the company anticipates higher sales volumes of key products and an improvement in spreads.

 

LOTTE Fine Chemical reported revenue of KRW 525.3 billion and operating profit of KRW 22 billion. However, operating profit declined as international prices for key products weakened, the exchange rate turned unfavourable and sales volumes fell.

 

The company plans to maintain its investment momentum in high-growth businesses, particularly Green Materials, which includes food and pharmaceutical materials. It is also expanding production capacity for TMAC, a key raw material used in semiconductor developers.

 

LOTTE Energy Materials recorded revenue of KRW 289.7 billion and an operating loss of KRW 21.3 billion.

 

Despite remaining in the red, the company delivered year-on-year revenue growth and a modest improvement in profitability, supported by increased sales to North American energy storage system (ESS) and global electric vehicle (EV) customers.

 

The outlook for the fourth quarter is more encouraging, with sales volumes and profitability expected to improve gradually. Growing ESS and EV demand in North America, coupled with the start-up of a new production line in Malaysia, is expected to support the recovery.

 

LOTTE Chemical's third-quarter performance underscores the continuing strain on the global petrochemical industry, where geopolitical uncertainty, supply pressures, volatile raw material prices and weak demand continue to erode margins.

 

With traditional chemicals operations facing persistent headwinds, the company is betting on operational restructuring, integrated production systems and an expanded high-value-added product portfolio to restore structural profitability and build a more stable foundation for future growth.