South Korea's Lotte Chemical reported a first-quarter 2026 operating profit of 73.5 billion won, reversing a year-earlier loss, as the petrochemical major improved feedstock procurement and adjusted plant run rates to counter Middle East geopolitical risks and rising raw material costs. The result signals improved margins for overseas buyers of basic and advanced chemical materials.
Segment performance
Basic chemicals, including LC Titan and LC USA, posted 3.45 trillion won in revenue and 45.5 billion won in operating profit. The return to profit was driven by higher selling prices and a positive feedstock lag effect. The advanced materials segment recorded 1.02 trillion won in revenue and 61.5 billion won in operating profit, supported by the end of year-end inventory adjustments and recovering downstream demand.
Subsidiary results
Lotte Fine Chemical reported 510.7 billion won in revenue and 32.7 billion won in operating profit, lifted by rising international prices for key products and higher sales volumes. Lotte Energy Materials posted 159.8 billion won in revenue but an operating loss of 5.0 billion won, narrowing its deficit thanks to a lag effect from rising feedstock prices, despite persistent downstream uncertainty.
Supply-chain stability moves
Lotte adjusted planned maintenance at its Yeosu plant to ensure uninterrupted production of raw materials for medical IV fluid bags. It also pre-emptively supplied raw materials for construction concrete admixtures at a volume equal to 140% of domestic demand, reinforcing supply reliability for healthcare and construction sectors.
Restructuring and capacity expansion
The Daesan plant will physically split in early June, with an integrated corporation targeted for September. The Yeosu plant has been executing a restructuring plan since March. Separately, Lotte is building the country's largest single compounding plant, due within the year, to produce 500,000 tonnes/year of engineering plastics, later expanding into high-performance Super EP grades. Lotte Energy Materials expects higher Q2 sales as customers shift to North American ESS and shipments of AI-grade circuit foil begin.
What buyers should watch
Lotte expects continued impact from planned maintenance and external uncertainty in Q2, but forecasts sustained profitability from spread improvements. The company's focus on optimising production operations and expanding high-value-added EP capacity could tighten supply for standard grades while opening new sourcing options for specialty engineering plastics. Overseas buyers should monitor the Daesan restructuring timeline and the new compounding plant's commissioning schedule.
Source: Read the original report | Published: May 11, 2026