Prolonged Ukraine Crisis... Inevitable Negative Impact on Cars and Smartphones vs Benefits for Oil Companies

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[Asia Economy Reporter Ji Yeon-jin] As countries impose sanctions on Russia following its invasion of Ukraine, listed companies in the domestic stock market are experiencing mixed fortunes across different industries.

According to a report published on the 2nd by Hana Financial Investment, industries that consider Russia a demand market, such as automobile manufacturers, smartphone makers, and some food and beverage companies are expected to face short-term negative impacts due to this war. In the case of automobiles, Korean brands hold a 23% market share in Russia, so a decline in demand is expected to inevitably have a negative effect. However, since Russia accounts for only 5.8% of global automobile sales, the impact is considered limited as losses can be offset in other regions.

For smartphone companies, Russia accounts for only 4% of their market, but since a large portion of special gases used in semiconductor manufacturing processes are imported from Russia, the global supply shortage that emerged after COVID-19 could worsen. In fact, Hyundai's plant in Saint Petersburg decided to halt operations from the 1st to the 5th of this month due to semiconductor supply disruptions. Hana Financial Investment's Research Center stated, "The negative impact of Russian sanctions on individual industries through global supply chain disruptions is expected to be somewhat greater," adding, "smartphones and automobiles that use semiconductors may also face additional indirect supply disruptions." The secondary battery industry could also face increased battery production costs due to rising nickel prices if sanctions include Nornickel, the world's second-largest nickel supplier used as cathode material. Additionally, since Russia accounts for 5-6% of the global wheat supply, food and beverage companies are also expected to be hit by rising flour prices.

However, since Russia is the world's third-largest crude oil producer and the second-largest natural gas producer, energy price increases resulting from these sanctions could be positive for refining companies. Also, if Russian natural gas consumption decreases, new LNG carrier orders may increase, making shipbuilding a beneficiary as well.

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