Companies that colluded on the prices of plastic compound products used for wire insulation materials have been sanctioned by the Fair Trade Commission. These products are core materials used in the manufacturing of wires and cables for clients such as the Korea Electric Power Corporation and construction companies.
On the 31st, the Fair Trade Commission announced that it had detected price collusion among four companies producing and selling plastic compounds: DY, Seji Chemical, Polyone Technology, and TSC. It imposed corrective orders along with a penalty surcharge of a total of 67 million won.
According to the Fair Trade Commission, the four companies agreed to raise the selling price of compound products supplied to certain wire manufacturers by 200 to 300 won per kilogram between 2021 and 2022. It was determined that they took joint action under the pretext of rising raw material prices due to the coronavirus pandemic and the Ukraine war.
Plastic compounds are semi-finished products processed into rice grain-shaped pellets by mixing additives and pigments with general-purpose resins such as polyethylene. They are widely used in the finished goods form as exterior materials for electrical and electronic components, automotive parts, semiconductor packaging, and cable insulation for communications.
The Fair Trade Commission believes that the collusion of these companies has restricted competition and affected the final supply prices of wires and cables. In fact, the compounds involved in the collusion are used as insulation materials for products delivered to KEPCO and major domestic construction companies.
The Fair Trade Commission stated, "This is the first case of detecting and sanctioning collusion in the plastic compound market for wires" and noted, "We plan to strengthen monitoring of actions that undermine the competitive environment in the fields of materials, parts, and equipment, and to take strict measures upon detection of violations in the future."