KOREA REPORT - AUGUST, 2019.
Korea is gearing
up to fire back at Japan after Japan removed its fast-track export status, while
seeking ways to mitigate the economic impact of the restrictions as two
countries¡¯ bilateral relations sink to a recent rock bottom. Japan on 7th officially declared a revised
bill that excludes SKorea from its list of trusted trading partners. Under
the revised bill, Korea is categorized as group B, along with 10 to 20 nations
subject to individual screening for shipments of certain items designed by
Japanese government. Prime Minister Lee Nak-yon said Japan had granted its
first approval for exporting extreme ultraviolet photoresists to Korea on 7th.
EUV photoresists is a key material for Samsung¡¯s chipmaking foundry
business. ¡°The government will continue to beef up its diplomatic efforts
to restore from Japan¡¯s economic attack,¡± he said. Domestic industries viewed that
Japan¡¯s approval of the high-tech material export to SKorea in 34 days was
intended to avoid criticisms from the international community.
HHI Group is mulling on timing to submit
request of corporate combination approval to competition authorities. It fixed five
authorities to take examination, Korea, EU, China, Japan, and Kazakhstan, and
submitted requests to Korean and Chinese authorities. It has been under
preliminary negotiation with EU authority since April. Sources said that HHI is
closely monitoring current uncertainties, including latest Seoul-Tokyo dispute
to find an optimal timing for favorable results by the authorities.
The acquisition of DSME by HHI might
endanger Korean marine equipment manufacturers, industry officials said in a
debate. The policy
discussion was held on 13th in Seoul, hosted by ¡®Public Economy and Social
Agreement Forum¡¯ and arranged by ¡®Shipbuilding 4.0 Research Group.; A
participant argued that current approach does not provide a safeguard for
equipment makers, who can be affected by growing control of HHI Group over
them. She called for the government and KDB to draw plans to empower the
equipment industry before fixing the owner of DSME. Another participant
commented that HHI might reduce the shipbuilding output to clear competition
review, warning that reduction would harm the equipment manufacturers, who are
dependent on the shipbuilders. An official from DSME labor union said that some
medium-sized shipyards, to which DSME has been providing support in design and
technologies, would be isolated and endangered if the support stops. On the
other hand, an expert said that the merger might enhance competitiveness of
Korean shipbuilding industry to China and Japan. He said that the merger would
improve R&D capabilities as well as attracting more talents into the
industry.
Qatar's ultra large scale project to order
LNG carriers would be outlined as early as 2H of 2019. The project,
which is for ordering over 100 LNG carriers worth up to KW20 tril ($16.4 bil)
for about 10 years, is receiving great attention from the Big3 (HHI, SHI and
DSME). According to industrial sources, Qatar Petroleum is likely to select
LNGC operator for its current North Field Expansion project around June next
year. It is expected that QP will choose final operators to ink charter
contract in June 2020, before concluding official deal to build LNG carrier. There
is a high possibility of QP concluding slot reservation deal with the
shipbuilders within this year. One shipyard official commented that signing the
slot reservation deal is no different to securing new order. Last April,
QP issued an 'invitation to tender' for the reservation of ship construction
capacity required for the LNG carrier fleet for its NFE Project, which will
increase Qatar's LNG production capacity from 77 mil tons per annum (mta) to
110 mta starting in 2024. Three Korean shipbuilding giants submitted their
tender proposals to QP in June. QP is expected to order 40 vessels this time,
followed by additional 40 options placed. For NFE project, about 60 units will
be ordered first.
Japan
on 7th officially excluded SKorea from its list of trusted trading partners
[p.2]
President
Moon is facing the biggest crisis of his term yet [p.4]
SKorea¡¯s
hourly minimum wage for next year confirmed at $7.10 [p.6]
SKorea
plans its sixth international cruise terminals in Jeju island [p.6]
NK
fired projectiles on July 31st, Aug 6th, 10th and 25th, nine altogether this
year [p.8]
NK
slammed SKorea for combined military exercise with the US [p.8]
Defense
ministry proposed a defense budget of $41.29 bil for next year [p.10]
SKorea¡¯s
fiscal balance soared to record high deficit of $16 bil in 1st half [p.11]
SKorea¡¯s
economic growth this year may fall below 2% at worst [p.12]
SKorea's
trade surplus came to $1.72 bil in Aug [p.12]
Samsung
Electronics retained its top position in terms of brand value [p.15]
LG
Chem reached KW30 tril ($24.6 bil) in sales this year, as of 26th [p.15]
SK
Telecom became first in the world to have over 1 mil 5G subscribers [p.16]
Posco¡¯s
cryogenic high manganese steel approved for LNG storage tanks [p.16]
SKorea's
foreign exchange reserves came to $401.48 bil as of end Aug [p.19]
SKorea's
central bank left its policy rate unchanged at 1.5% on 30th [p.19]
HHI
Group to submit request of corporate combination approval [p.20]
Acquisition
of DSME by HHI might endanger local marine equipment manufacturers [p.20]
STX
O&S secured RG for two mid-sized product/chemical tankers [p.23]
Qatar's
project to order LNG carriers would be outlined as early as 2H 2019 [p.23]
-------------------------------------------------------------------------------------------------------
ATTACHMENT: Korea Report - August 2019 (PDF FILE)
Please let us know if you have difficulty opening the file.
