Trend Structural decline of energy demand in Korea's steel and petrochemical industries

Summary

Korea's industrial energy demand is being reshaped by a structural slump in its most energy-intensive sectors. Steel and petrochemicals face global steel overcapacity, rising Chinese petrochemical self-sufficiency and new petrochemical capacity worldwide, which limit their output and energy use. In contrast, the boom in the IT industry keeps energy demand from machinery rising. By fuel, industrial demand for natural gas used in commercial self-generation and for electricity grows, while coal and oil decline with the weakness of steel and petrochemicals. The net effect is an industrial sector whose energy demand shrinks over the outlook period even as the economy grows.