© Reuters. FILE PHOTO: Members of the Cargo Truckers Solidarity union take part in a protest in front of Kia Motor’s factory tin Gwangju, South Korea, June 10, 2022. Yonhap via REUTERS/File Photo
By Byungwook Kim and Heekyong Yang
SEOUL (Reuters) -Defiant South Korean truckers are considering blocking shipments of coal to a power plant if the government rejects their demands for minimum pay guarantees, a senior trade union official said on Monday.
The Cargo Truckers Solidarity Union is weighing several options to press its demands, including stopping coal to generate electricity and shutting down petrochemical complexes by blocking their shipments in and out.
“We are thinking of a complete blockade,” the union leader, Kim Jae-gwang told Reuters, referring to coal shipments to a power plant in Gunsan, North Jeolla Province, that uses trucks for its coal.
“But we hope such a situation doesn’t happen.”
The impact of a blockade of the power plant would be limited in terms of national electricity output, even in the high-demand summer, but it would mark a significant intensification of the truckers’ action.
The strike, in its seventh day, has cost key industrial sectors more than $1.2 billion in lost production and unfilled deliveries, the government estimated on Monday, as the damage spreads deeper through Asia’s fourth-largest economy.
The union is protesting against soaring fuel prices and demanding minimum pay guarantees. Four rounds of negotiations with the government have failed to find a compromise.
Some 6,600 truckers, or about 30% of union members, were striking on Monday, according to a transport ministry estimate.
Kim said his members were for now letting some movements to prevent the shutdown of petrochemical facilities, which would cost a lot of time and money to restart, but the union would “reconsider” that if the government did not show willingness to negotiate.
The strife is a major test for South Korea’s new conservative president, Yoon Suk-yeol, raising the risk of eroding his support, distracting him from his agenda and sowing the seeds of long-term antagonism with powerful unions.
On Monday, Yoon called for ways to reduce the impact of the strike on industry. A transport ministry official said no new meeting with the union was scheduled.
The strike has forced steelmaker POSCO (NYSE:PKX) to shut some plants because of a lack of space to store finished products. Hyundai Motor has cut production for some assembly lines and cement makers have also reduced output.
CHIPS NOT DISRUPTED
Petrochemical firms have seen average daily shipments from factories tumbling 90% as truckers target complexes in Ulsan, Yeosu and Daesan, an industry association said.
It was not immediately clear if petrochem firms were also cutting production.
The industry ministry said in its first such calculation that the strike had cost automobile, steel, petrochemical and cement sectors about 1.6 trillion won ($1.2 billion) in lost production and failed deliveries between June 7 and June 12.
There have been as yet no reports of major production disruption at Samsung Electronics (OTC:SSNLF), SK Hynix and other semiconductor firms.
Kim Yang-pang, a researcher at Korea Institute for Industrial Economics & Trade, estimated Samsung (KS:005930) Electronics and SK Hynix and their suppliers had enough supplies of raw materials in stock for at least two weeks.
Samsung declined to comment. Hynix did not immediately respond to a request for comment but sources at semiconductor companies said had inventories of key materials.
The government has urged the truckers to return to work but said it would seek to reflect their demands in legislation. It has also deployed some 100 military vehicles to help companies with shipments.
The truckers are demanding an extension of subsidies, set to expire this year, that guarantee minimum wages as fuel prices rise. The Yoon administration says it is up to parliament to change the legislation.
As supply bottlenecks plague the global economy, any prolonged slowdown in the production and shipment of chips, petrochemicals and autos could add to fears about rising inflation and slowing growth.
South Korea’s inflation is set to hit a 24-year high of 4.8% this year, the Organisation for Economic Cooperation and Development said last week, while it cut its growth forecast to 2.7% from a December projection of 3.0%.
South Korean exports dropped 14% in November, the highest in 2.5 years
South Korea’s exports fell 14 percent year-on-year to $51.91 billion in November, preliminary data from the Ministry of Commerce, Industry and Energy showed. The November drop was the biggest in 2.5 years since May 2020 and was caused both by the deteriorating global economy, which even a Google price chart showed, and a truckers’ strike in the country.
South Korea exports 2022 – reasons for the drop
Exports fell for the second month in a row. Analysts on average expected an 11% decline, according to Trading Economics. Respondents to MarketWatch predicted a 10.5% decline.
Shipments of semiconductor products overseas, the country’s top export item, fell 29.8%; petrochemicals fell 26.5% and steel exports fell 10.6%. Meanwhile, exports of automobiles jumped 31% and petroleum products 26%.
Exports to China, South Korea’s largest trading partner, fell by 25.5%, and to Asian countries – by 13.9%. Below, supplies to the USA grew by 8% and to the European Union – by 0.1%.
In January-November exports rose by 7.8% on the same period last year and reached a record $629.1 billion.
South Korean imports rose 2.7% to $59.2 billion in November, marking the 23rd consecutive month of gains, but the current rate of growth is the lowest since November 2020. Experts had predicted an increase of only 0.2%.
South Korea’s trade deficit last month was $7.01 billion, compared with a surplus of $2,973 billion a year earlier.
The negative balance was recorded for the eighth month in a row. As a result, by the end of 2022, the country may record a foreign trade deficit for the first time since the financial crisis in 2008.
Earlier we reported that the UN estimates the cost of humanitarian aid in 2023 at a record $51 billion.
The UN estimates humanitarian aid costs in 2023 at a record $51 billion because of an impending humanitarian crisis
Joint humanitarian operations will require a record $51.5 billion in 2023 to address urgent problems.
The UN Office for the OCHA estimates that 339 million people will need urgent aid in 2023. At the same time, OCHA called on donor countries to provide funds for assistance in 2023 to the 230 million people most in need, living in 68 countries.
Griffiths explained that aid is needed not only for people experiencing conflicts and disease outbreaks. but also for those suffering the effects of climate change, such as people in peninsular Somalia facing drought and those in Pakistan experiencing severe flooding. For the first time, the growing humanitarian crisis has brought the number of displaced people worldwide to the 100 million mark. Also worsening an already bad situation is the worldwide coronavirus pandemic, which affects the poor. Note that the general economic crisis has begun to negatively affect even the Netflix price chart.
Earlier we reported that house prices in the UK fell by 1.4% in November.
Average house prices in the UK fell 1.4% in November
Average house prices in the UK fell 1.4% in the previous month in November to 263,788 thousand pounds (about $319,000), according to the British mortgage company Nationwide Building Society.
The decline was recorded at the end of the second consecutive month and was the most significant in almost 2.5 years – since June 2020. Analysts on average had forecast a decline of only 0.3%, according to Trading Economics.
Are house prices in the UK going to fall even more?
Residential real estate prices in November compared to the same month last year increased by 4.4%. At the same time, experts expected a larger increase of 5.8%. The growth rate slowed down significantly compared with 7.2% in October. Because of the difficult economic situation, British investors are investing in other instruments. The Microsoft price chart, for example, is showing potential for growth, so many are interested in the U.S. stock market.
“The market looks set to remain under pressure in the coming quarters. Inflation will remain high for some time, and interest rates are likely to continue to rise,” believes Nationwide Senior Economist Robert Gardner. – The outlook is unclear, and much will depend on how the overall economy behaves, but a relatively soft landing is still possible.”
Earlier we reported that Sanctions Circumvention was included in the EU’s list of criminal offenses.
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