Concerns are spreading over a chain reaction of disruptions across South Korea's key industries — including semiconductors, steel and shipping — following Qatar's declaration of force majeure on liquefied natural gas (LNG) supplies. While companies hold several months' worth of inventory, analysts warn that a prolonged LNG supply disruption will inevitably hurt related production and drive up costs.
According to industry sources on Sunday, Qatar's state-owned gas company's force majeure declaration has raised growing concerns over helium supply disruptions in the semiconductor sector. Helium, essential for wafer cooling and other processes in chip manufacturing, is produced as a byproduct during LNG refining and liquefaction. Any instability in LNG facilities or supply inevitably shakes the helium supply chain as well.
The core problem is that South Korea depends on Qatar for 65% of its helium imports. IBK Investment & Securities warned Sunday that "the force majeure declaration at Qatar's Ras Laffan LNG facility, which accounts for one-third of global helium supply, is expected to cause serious disruptions to helium supply as a byproduct."
Domestic companies say they currently hold roughly six months' worth of helium inventory and have secured alternative supply sources. However, the environment surrounding supply procurement is deteriorating rapidly, with helium spot prices surging 100% in just two weeks. "If the dispute drags on, it could escalate into a bottleneck risk for advanced semiconductor manufacturing and AI infrastructure buildout," warned Lee Dong-wook, a researcher at IBK Investment & Securities.
The steel industry is also on high alert over LNG supply disruptions. Some steelmakers use LNG as fuel for captive power generation and as a raw material for processing semi-finished products. Hyundai Steel uses LNG to generate its own electricity at a power plant within its Dangjin steelworks. POSCO (005490.KS) produces a significant portion of its energy from byproduct gases generated in its blast furnace operations but also uses LNG to some extent.
Shipping companies that have signed long-term LNG carrier charter contracts with QatarEnergy face mixed situations. According to Korea Ratings, Pan Ocean (028670.KS), H-Line Shipping and SK Shipping each have five vessels — 15 in total — on long-term charter to QatarEnergy. Most can collect fixed charter fees regardless of whether cargo is loaded, but one SK Shipping vessel positioned inside the Strait of Hormuz could see its contract terminated. If the use of alternative shipping routes increases working capital burdens, cash flow pressure could mount during loan principal and interest repayments for ship financing.
Meanwhile, analysts say the crisis could accelerate South Korea's push to diversify energy sources away from the Middle East. The long-held assumption that Middle Eastern energy is "cheap and stable" is being shaken.
In fact, the Iranian government reportedly began charging transit fees of up to $2 million (approximately 3 billion won) per passage through the Strait of Hormuz starting Saturday local time. Middle Eastern crude oil had been considered more economical than North American or African alternatives due to shorter shipping times, but the added toll burden would inevitably reduce the economic incentive for Korean companies.
Even if a ceasefire is reached through U.S.-Iran negotiations, tensions could reignite at any time and strike Middle Eastern energy infrastructure. Analysts say this has increased the risk associated with long-term energy supply contracts with the region.
