[Click eStock] "Secondary Battery, Export Volume Increase Signals Bottom"

Expected Bottom in Q1 This Year
LG Chem and POSCO Future M Top Picks

Hyundai Motor Securities stated on the 19th that it views the increase in export volume in the secondary battery sector as a bottom signal and maintains the view that the bottom will be in the first quarter. The top preferred stocks remain POSCO Future M and LG Chem.

Kang Dong-jin, a researcher at Hyundai Motor Securities, said, "Although the export price of cathode materials in January is still declining, the volume has turned to an improving trend compared to the previous month," adding, "The export price of cathode materials is expected to continue falling at least until March, and from April, the decline is likely to significantly slow down or stop."

Since February, lithium prices have not fallen further, and some lithium prices have rebounded. Nickel has also been gradually rising after the Chinese New Year (Chunjeol). If this stable trend continues, it is possible that the price decline will stop or even partially rise from May. Researcher Kang analyzed, "Generally, the price of medium-to-large batteries lags cathode material prices by three months and metal prices by six months," adding, "Therefore, it is possible to expect that the price decline of medium-to-large batteries will significantly slow down from the second half of the year." He added, "With increased predictability of prices, the most important factor is visibility of demand, and we interpret the increase in export volume as a bottom signal."

The bottom of the secondary battery sector is expected to be in the first quarter of this year. Researcher Kang said, "Material companies that can respond to the U.S. market will continue to show differentiated external growth," and forecasted, "From the second half of this year, battery pack prices are expected to fall below $100 per kilowatt-hour (kWh), down $50 from the 2023 average of $140 per kWh, making electric vehicles and internal combustion engine vehicles equivalent, which could raise expectations for demand recovery."

The top preferred stocks are LG Chem, POSCO Future M, and Samsung SDI. Researcher Kang explained, "Among material companies, we most prefer LG Chem and POSCO Future M, which meet Foreign Entity Ownership Cap (FEOC) regulations and have increasing U.S. volume, and among cell companies, we most prefer Samsung SDI, which has attractive valuation."

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