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KOREA REPORT - JULY, 2019.
Japanese
government tightened the export process to SKorea of three classes of hi-tech
materials
crucial to production of chips and display panels, fluorinated polyimide,
photoresist and hydrogen fluoride, used in semiconductor and smartphone
production starting 4th, which are dominated by Japanese companies globally,
and removed SKorea from a whitelist of 27 countries that receive preferential
treatment for trade with Japan, increasing import process to up to 90 days. In addition to raising the issue at WTO¡¯s
General Council on 24th in Geneva, SKorean government sent a strong opinion
to Japanese calling for complete withdrawal of its export restrictions.
Korea Gas is
expanding its global presence in the liquefied natural gas market with its
robust technologies and overseas networks. It is currently
participating in 25 global projects in 13 nations, including exploration,
development and production of natural gas. Last year, Kogas sold 36 mil tons of
LNG in Korea after purchasing from Qatar, Oman, Australia, the US, Malaysia and
Russia. It has now secured enough amount of natural gas that can be used for
another six years. Kogas has succeeded in gas exploration in Mozambique and
Myanmar. In Area 4 of Rovuma basin in northern Mozambique, Kogas is pursuing
Coral floating LNG and Rovuma LNG projects, largest in Korea¡¯s resource
development history. In Myanmar, it also succeeded in producing natural gas
from the nation¡¯s A-1/A-3 offshore wells. Kogas also completed production and
shipment of LNG from Australia¡¯s Prelude project in June. The offshore project,
in which Kogas holds a 10% stake, is capable of producing 3.6 mil tons of LNG
per year. Kogas is taking part in Mexico¡¯s Manzanillo LNG Terminal, in which
Kogas has a 25% stake with an investment of KW62.3 bil ($52.9 mil), now sees a
yearly return on investment of more than 60%. Kogas earned a net income of
KW42.2 bil from overseas markets last year.
HHI Group has officially started the process to earn approval from foreign
anti-trust regulators for its proposed takeover of DSME. According to
industrial source, KSOE submitted an application for merger with DSME to a competition
authority in China on 22nd through a local adviser in the country. This is the first time KSOE submitted such
application to foreign competition authority. On 1st, KSOE filed a request for
an official review on the merger at Korea Fair Trade Commission. HHI Group
decided to submit a similar request to competition authorities in the EU,
Japan, China and Kazakhstan. Among them, China has become the first country
that starts screening of the merger. The group had been discussing the matter
with regulators of the EU since April, but request has not yet been submitted. Getting
approval from the countries is necessary as possible merger of the two major
shipbuilders may reshape global shipbuilding landscape with their dominant
market position. If any country disapproves of the request, the merger is
likely to founder.
TOPICS.
Japan
on 4th tightened export process to SKorea of three classes of hi-tech materials
[p.2]
SKorea
on 4th delivered a stern warning to Japan [p.2]
SKorea
pledged to foster ¡°smart harbors¡± across the country [p.4]
NK
fired two short-range missiles on both 25th and 31st demonstration its power
[p.7]
NK
reportedly told the US that it wants SKorea out of future nuclear talks [p.7]
Huawei
may have violated US sanctions by providing equipment to NK [p.8]
Campaign
to boycott Japanese products and services here is gaining steam [p.10]
Moody's
maintained its rating on SKorea at "Aa2" with stable rating [p.11]
SKorea
ranked 12th out of 205 countries in terms of GDP in 2018 [p.11]
SKorea's
national assets came to $13.13 tril as of end 2018 [p.11]
SKorea's
trade surplus came to $2.44 bil in July [p.12]
PERFORMANCE
IN SECOND QUARTER [p.14]
Korea
Gas is expanding its global presence in LNG market [p.16]
Hyundai
E&C obtained whopping $2.7 bil deal in Saudi Arabia [p.19]
Bank
of Korea unexpectedly cut its policy interest to 1.5% from 1.75% [p.20]
HHI
started process to earn approval starting with China for takeover of DSME [p.21]
Korean
shipbuilders still saw strong LNG carrier trend for 1H of 2019 [p.22]
HHI
Holdings recorded $5.66 bil of revenue, $167.7 mil of operating profit in 2Q [p.24]
SHI
posted $1.46 bil of revenue and $46.7 mil of operating loss [p.25]
HMM
has joined THE Alliance, shipping coalition of German and Asian liners [p.26]
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