LG Chem Ltd. is considering shutting down its production line in the southeastern tip of the country due to oversupply, industry and company sources said Sunday.

South Korea's No. 1 electric vehicle battery maker said it has informed its workers of the plan to close down the line in Yeosu, 455 kilometers southeast of Seoul, which produces 50,000 tons of phthalic anhydride annually.

Phthalic anhydride is used in the manufacturing of polyesters.

Industry watchers believe that LG Chem's plan stemmed from the oversupply of the organic compound caused by Chinese rivals, which have been eating into its profits, and a toxic gas leak in its Indian plant.

"The phthalic anhydride production line has been operating so far," said an LG Chem official, adding the company has been reviewing the feasibility of the line and market situation. (Yonhap)