Striking S.Korean truckers say they may block coal to power plant
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[June 13, 2022] By
Byungwook Kim and Heekyong Yang
SEOUL (Reuters) -Striking 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, on strike for a seventh day, 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," union leader Kim Jae-gwang
told Reuters, referring to coal shipments to a power plant in Gunsan,
North Jeolla Province that he did not name, which 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 would
mark a significant intensification of the truckers' action.
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The strike 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 7,050 people, or about 32% of union members, were striking on
Monday, according to an updated transport ministry estimate. The
ministry said in a statement it plans to continue talks with the union
to resolve the situation.
Kim said his members were for now letting some movement of traffic 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 strike 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 to shut some plants because of a
lack of space to store finished products.
It also caused manufacturing losses of 5,400 vehicles for South Korean
automakers between June 8-11, according to the Korea Automobile
Manufacturers Association, with Hyundai Motor cutting production for
some assembly lines. Cement makers have also reduced output.
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![](../images/061322PIX/busine31.jpg)
Trucks transporting containers drive past members of the Cargo
Truckers Solidarity union gathering in front of an inland containers
depot in Uiwang, South Korea, June 13, 2022. Yonhap via REUTERS
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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.
Two petrochemical industry sources, who declined to be identified, told Reuters
that although naphtha crackers are still running at previous rates, some
companies may be forced to halt them as soon as later this week if the situation
continues.
There have been as yet no reports of major production disruption at Samsung
Electronics, SK Hynix and other semiconductor firms.
Kim Yang-pang, a researcher at Korea Institute for Industrial Economics & Trade,
estimated Samsung Electronics and SK Hynix and their suppliers had enough
supplies of raw materials in stock for at least two weeks.
Samsung declined to comment, while SK Hynix did not immediately respond to a
request for comment.
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.
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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, cutting
its growth forecast to 2.7% from a December projection of 3.0%.
(Reporting by Byungwook Kim and Heekyong Yang; Additional reporting by Joyce
Lee; Writing by Choonsik Yoo; Editing by Stephen Coates, Edwina Gibbs and Jan
Harvey)
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