Seoul prosecutors indict six petrochemical makers over a record 16.4 trillion won cartel

Prosecutors put the sales covered by the agreements at 16.3961 trillion won, the largest figure in any price-fixing case they have investigated ^[4]. Over the 64 months from January 2021 to April 2026, that comes to about 256 billion won a month, or roughly 3.1 trillion won a year ^[1]. The total is what buyers paid for the eight products, or rather what the sellers booked on them. The money buyers lost is a slice of it: the gap between the agreed prices and what competing sellers would have charged. On the full base, each percentage point of that gap is about 164 billion won ^[2]. The published account of the indictment does not include an overcharge estimate, a fine, a split of sales by product, or which of the seven accused companies, a list that includes LG Chem and Hanwha Solutions, is outside the six charged ^[12].

The scheme prosecutors describe was built to hold market share. Team leaders from each company met to decide when and by how much each price would move, and the companies set in advance the order in which they would send out increase notices ^[6]. With large customers that ran procurement tenders, they agreed which firm would win and what each would bid. They also agreed not to approach one another's customers ^[7]. On that account, the sellers did not compete for each other's buyers for five years and four months ^[1]. For the customers that ran those tenders, the bids they compared had been settled before submission ^[7].

The chip connection runs through two of the eight products. Caustic soda is used in semiconductor manufacturing, and ECH is the raw material for epoxy resin that goes into chip packaging and printed circuit boards ^[5]. PVC, used in pipes, window frames and wire coating, is on the same list ^[5].

"Price-fixing in petrochemical products leads to higher purchasing costs for industries that use them as raw materials, so related companies inevitably suffer direct harm first," a prosecution official said, according to Seoul Economic Daily ^[9].

The case can still go more than one way. A conviction followed by a measured overcharge would put a won figure on more than five years of downstream purchases, at roughly 164 billion won per point ^[2]. If the defence shows that the agreed price moves tracked feedstock costs, the coordination would be proved but the overcharge would be small. The case could also narrow. Prosecutors sought arrest warrants for eight senior executives and employees, and the court granted two, or 25% ^[3]. The warrant decisions are the only court ruling in the reported record ^[11].

I think the tender allegation is the strongest part of the downstream case. A buyer comparing pre-arranged bids had no competing price to fall back on ^[7]. The view that buyers paid materially more is wrong if a court accepts that the agreed changes followed costs. In that case 16.4 trillion won stays a record for sales covered, and the bill for customers comes in at a small fraction of it.