Invest KOREA

According to Pulse by Maeil Business News Korea,

South Korea will pursue intergovernmental framework with countries with raw materials necessary to produce the country’s strategic industrial strengths of chips, steel, batteries, bio and chemicals.

According to multiple sources from the Ministry of Trade, Industry and Energy and Korea Customs Service on Monday, the new government under President Yoon Suk-yeol will seek high-level intergovernmental network with countries with supplies critical for the country’s key exports and strategic power.

“We are working behind the scenes to organize high-level bilateral sessions” with related parties from the countries on which Korea depends for strategic materials imports, said an unnamed official from the industry.

The industry ministry has been working on measures to stabilize supplies in four key areas – chips, steel, secondary battery, bio and chemical.

It plans to enhance cooperation with Vietnam to ensure stable supply of white phosphorus and Mexico for anhydrous hydrogen fluoride (AHF) essential for chip production.

AHF is hydrofluoric acid that does not contain water. It is used in chip cleaning process to remove impurities or etching process to remove unnecessary parts of the circuit through hydrogen fluoride work. White phosphorus is used in NAND flash memory production.

In the steel sector, the ministry’s draft includes enhancing cooperation with South Africa for manganese metal, and in secondary battery with Chile for lithium hydroxide, Canada for spheroidal graphite, and Indonesia for nickel. In bio and chemical sector, the draft also includes strengthening partnership with Mexico for titanium dioxide supply and Brazil for silicon metal.

To prepare the new trade partnership for the key materials, the country’s trade affairs will continue to be overseen by the Ministry of Trade, Industry and Energy in the new administration, said a senior government official who asked to be unnamed. The country’s foreign minister has been seeking to bring back trade affairs under its arm.

“After review by the president’s transition team, it has been concluded that trade affairs should remain with the trade ministry to carry out administrative agenda and pledges,” the official said.

While the trade ministry will work on a broad framework to build a network of strategic resource supplying trade partners, Korea Customs Service will build digital data to monitor supply conditions and prices on a real-time basis.

“It was difficult under existing tariff statistics categorization to manage materials in the sub categories,” said an unnamed official from the Korea Customs Service. “We will come up with a more detailed reporting system for key material types to monitor prices and import and export volume on a real-time basis.”

The latest key raw materials cooperation framework is considered the first step to establish a bottom-up trade strategy based on measures to secure actual supply.

By Song Min-geun, Baek Sang-kyung, and Lee Eun-joo

Copyrights Pulse by Maeil Business News Korea. All Rights Reserved.

Source: Pulse by Maeil Business News Korea (May 17, 2022)