[Click e Stocks] Korea Zinc, No Business Against Economic Slump

[Asia Economy Reporter Junho Hwang] Shinhan Financial Investment lowered the target price of Korea Zinc to 680,000 KRW on the 21st.

Korea Zinc's consolidated operating profit for the second quarter of this year is expected to fall short of expectations by 0.9%, reaching 263.3 billion KRW. The separate operating profit is also expected to fall below expectations at 247.1 billion KRW, an increase of 12.9%.

The main reasons for the poor performance are attributed to the decline in metal prices over three quarters (compared to the second quarter: zinc -16.6%, annual -10.5%, gold -7.8%, silver -15.5%) and sluggish economic conditions, which prevented an increase in sales volume.

Recently, major zinc smelters in Europe have experienced production disruptions due to rising electricity costs, and Korea Zinc's Australian smelter, SMC, is also inevitably facing a decrease in production for the same reason.

Researcher Kwangrae Park of Shinhan Financial Investment stated, "Despite the supply shortage in the spot market, due to the US Federal Reserve's interest rate hikes and China's economic slowdown, zinc prices are expected to maintain a level in the low to mid 3,000 USD per ton range until the end of the year," adding, "If the global power shortage continues into the fourth quarter, production disruptions at SMC, which caused poor performance in the third quarter, may recur in the fourth quarter, making monitoring of this situation crucial at this time."

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