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  Korea Report - August 2019
  Author : Hwang & Co     Date : 19-09-05 17:06     Hit : 815    
   Korea Report - August 2019.pdf (472.7K), Down : 6, 2019-09-05 17:06:33

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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 Samsungs chipmaking foundry business. The government will continue to beef up its diplomatic efforts to restore from Japans economic attack, he said. Domestic industries viewed that Japans 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. 

TOPICS.

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]
SKoreas 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]
SKoreas fiscal balance soared to record high deficit of $16 bil in 1st half [p.11]
SKoreas 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]
Poscos 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]

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