Lotte Chemical stock faces deep Q3 loss as petrochemical squeeze worsens

Published on 11/02/2026 at 00:54 | Editorial responsibility: Rafael Müller, Editor-in-Chief AD HOC NEWS

Lotte Chemical stock is tied to a forecast KRW 163.2 billion third-quarter operating loss. Higher naphtha costs and Chinese oversupply pressure margins.

Profit Outlook Under Pressure

Higher feedstock costs and weak product spreads are weighing on Korean petrochemical earnings.
Chinese oversupply and soft global demand are limiting the sector's recovery prospects.
Business restructuring could provide a path to financial improvement, according to a Hana Securities analyst cited by ChosunBiz.

Lotte Chemical, KR7011170008, Illustration mit AI erstellt.

Lotte Chemical is heading into its third-quarter results under pressure as higher feedstock costs and weak petrochemical spreads squeeze profitability. A ChosunBiz report published on October 20 said FnGuide expected an operating loss of KRW 163.2 billion for the July-to-September period.

Feedstock Costs Squeeze Margins

The report linked the downturn to a sharp rise in naphtha, a key raw material for basic petrochemicals. Average naphtha prices rose from USD 557 per metric ton in January to USD 908 in September, while the average ethylene spread fell to USD 201.9 per ton in the third quarter from USD 256.2 in the second quarter.

That spread was below the USD 250 to USD 300 per ton break-even range cited by NH Investment and Securities. The pressure followed a first-half recovery, when Lotte Chemical returned to an operating profit of KRW 73.5 billion in the first quarter and KRW 110.1 billion in the second quarter.

Recovery Depends On Restructuring

ChosunBiz also reported a fourth-quarter operating-loss consensus of KRW 95.6 billion. The outlook remains constrained by Chinese oversupply, weak global demand, volatile oil prices and reduced cost competitiveness across the Korean petrochemical industry.

Hana Securities analyst Kim Sang-man said the earnings outlook left little room for operating conditions to improve, while financial benefits could emerge through business restructuring. The assessment places the focus on capacity changes and cost discipline rather than a rapid cyclical rebound.

Lotte Chemical's Business Position

Lotte Chemical is a South Korean petrochemical producer focused on basic chemicals made through facilities such as naphtha cracking centers. Its business is exposed to feedstock costs, ethylene pricing and demand across the broader chemical industry. In the Korean petrochemical market, it competes with LG Chem, Hanwha Solutions and Kumho Petrochemical, which were also discussed in the ChosunBiz industry report.