[Click e-Stock] "POSCO Holdings, Lithium Market Improvement Expected... Target Price Up"

On September 1, Heungkuk Securities announced that it is raising its target price for POSCO Holdings to 350,000 won, reflecting expectations of an improvement in the lithium market, while maintaining its "Buy" investment rating.

Jung Jinsoo, a researcher at Heungkuk Securities, projected that the normalization of lithium prices would have a positive impact on strengthening order negotiation power in the lithium sector. Jung stated, "Due to production cuts in China, lithium carbonate prices have surged by approximately 33.2% since July, recovering to around 80,000 yuan per ton for the first time in a year." However, he also noted, "The benefit is limited as lithium hydroxide, which is mainly used in the domestic secondary battery value chain, continues to be discounted in price." He added, "With Chinese lithium companies increasing production and operating rates, the likelihood of a further strong price rally is low."

However, he assessed, "For POSCO Holdings, improving operating rates is a more important task than lithium prices, and increased price volatility will positively contribute to strengthening order negotiation power."

In the steel sector, he predicted that the impact of high tariffs at home and abroad would become pronounced in the second half of the year, and that the market would show mixed trends regardless of seasonality. He explained, "Some demand from the second quarter was deferred to the third quarter, and following the final ruling on China's heavy plate anti-dumping investigation on August 28, a rebound in domestic market share and increased sales centered on heavy plate products are expected." Imports of Chinese heavy plate have accounted for about 20% of domestic demand, but considering the surge in imports before the final ruling, the relatively low 34% tariff compared to the preliminary ruling, and simultaneous price hikes, he expects the direct short-term impact to be limited.

He also pointed out that the expansion of tariff coverage on U.S. steel derivatives should be closely monitored, as it raises concerns about a decline in downstream demand.

Jung stated, "We have factored the reduction in net debt in the steel division into operating value, and, reflecting the improvement in the lithium market, have raised the operating value of this division by about 400 billion won." He added, "However, potential financial risks at POSCO E&C still require close monitoring, and are expected to be a burden on consolidated results in the second half of the year."

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