[Featured Stock] Baekkwang Industry Faces Caustic Soda Supply Shortage for Essential EV Materials... Profit Surge Becomes Reality

[Asia Economy Reporter Hyungsoo Park] Baekkwang Industrial is showing strong performance. The surge in demand for caustic soda used in manufacturing secondary battery materials has led to a price increase, which appears to have influenced the stock price.

As of 10:08 AM on the 25th, Baekkwang Industrial is trading at 5,780 KRW, up 12.89% from the previous day.

Baekkwang Industrial is an inorganic chemical product manufacturer producing alkali and chlorine using sodium chloride as raw material. In Korea, companies such as Lotte Fine Chemical, Hanwha Solutions, LG Chem, and OCI produce the same products as Baekkwang Industrial. It also produces sorbitol and maltitol used as food additives. For business diversification, it established a plant in Eumseong in 2019 to produce nitrous oxide (N2O). The Gunsan plant has introduced production facilities for high-purity chlorine and hydrogen chloride, special gases for semiconductors, pioneering the market.

In the first quarter, Baekkwang Industrial recorded sales of 54.4 billion KRW and operating profit of 8.1 billion KRW. Compared to the same period last year, sales increased by 17% and operating profit rose by 82%.

The price of caustic soda has risen internationally due to reduced supply caused by high global energy prices. Prices are steadily increasing due to growing demand from downstream caustic soda industries. According to the chemical industry, the average international price of caustic soda in the first quarter of this year was 638,000 KRW per ton, more than double the 302,000 KRW per ton in the same period last year.

Caustic soda is necessary in the process of removing impurities from cathode materials, one of the secondary battery materials. It is also used when extracting aluminum, a key lightweight material for electric vehicles, from ore. According to market research firm SNE Research, the global electric vehicle market size was approximately 6.5 million units last year. It is estimated to grow rapidly to 10 million units this year, 22 million units in 2025, and 59 million units in 2030.

Hansem Park, a researcher at SK Securities, said, "We focus on Lotte Fine Chemical and Baekkwang Industrial as beneficiary stocks of the strong caustic soda market," adding, "Looking at the supply and demand of caustic soda, supply is showing a red light, while demand is close to a green light."

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