[Featured Stock] Soaring Zinc Prices Boost Expectations for Korea Zinc's Earnings... New High

[Asia Economy Reporter Ji Yeon-jin] Korea Zinc's stock price is showing a strong upward trend as forecasts emerge that its third-quarter operating performance will improve due to a sharp rise in zinc prices on the 18th.

Korea Zinc reached an intraday high of 624,000 KRW on the KOSPI market, setting a new 52-week high. As of 9:15 a.m. that day, it was trading at 615,000 KRW, up 4.07% from the previous trading day.

Earlier, Hana Financial Investment projected that Korea Zinc's operating performance would improve due to the surge in zinc prices and raised the target price from 580,000 KRW to 680,000 KRW. The investment rating was maintained at 'Buy.'

Hana Financial Investment estimated Korea Zinc's third-quarter sales at 2.4 trillion KRW, a 20.2% increase year-on-year, and operating profit at 283.6 billion KRW, up 6.1%. Researcher Park Seong-bong of Hana Financial Investment said, "Despite a decrease in sales volume, operating profit is expected to exceed market expectations (265.8 billion KRW) due to the overall rise in metal selling prices and the increase in the KRW-USD exchange rate."

The London Metal Exchange (LME) zinc price, which had fallen below $3,000 per ton at the end of August due to concerns over the U.S. Federal Reserve's tapering and worsening Chinese economic indicators, surged to $3,795 per ton in mid-October, reaching the highest level in 14 years. This was driven by forecasts of reduced production at smelters whose profitability sharply deteriorated due to soaring energy prices.

With natural gas prices soaring and renewable energy supply disruptions causing the UK's electricity prices to rise more than sevenfold year-on-year, European electricity prices hit record highs. As a result, Nyrstar, Europe's largest zinc smelting company, announced plans to cut production at its European plants (Netherlands, Belgium, France) by up to 50%. Researcher Park said, "Although production disruptions in downstream industries are expected due to power supply shortages, considering that Nyrstar's European plants hold a 4.8% share of the global market and that energy demand for power generation is expected to increase as winter approaches, the possibility of additional production cuts cannot be ruled out, so zinc prices will continue to remain strong due to tight supply and demand." Park added, "Korea Zinc's operating performance is expected to improve for some time due to the sharp rise in zinc prices, and the battery foil plant scheduled to start operations by the end of next year will also contribute to profitability improvement."

This content was produced with the assistance of AI translation services.