Unstable Oil Supply... Alternative Energy Stocks Surge

Concerns Grow Over Potential for Sudden Halt in US-Iran War
Nuclear and Solar Power: Alternative Energy Stocks in the Spotlight

With the outbreak of war between the United States and Iran blocking the transportation of key energy resources such as crude oil and liquefied natural gas (LNG) through the Strait of Hormuz, stocks related to alternative energy—including nuclear and solar power—are drawing significant attention in the stock market.

Concerns Mount Over Halted Supply of Middle Eastern Oil Amid Middle East Conflict

According to political sources on March 17, the Democratic Party of Korea and the government announced the previous day that, due to the aftermath of the Middle East war, international oil prices have surged and supply-and-demand instability has increased. In response, they plan to expand nuclear power generation. The government intends to complete early maintenance of nuclear power plants currently under repair by mid-May, aiming to boost the nuclear power utilization rate from the current high-60% range to above 80%.

As the government reveals plans to increase the use of nuclear and other alternative energies, related sectors are gaining attention in the stock market. According to the Korea Exchange, Doosan Enerbility, a leading nuclear power stock, has seen its share price rise by about 40% so far this year, outpacing the Korea Composite Stock Price Index (KOSPI), which rose by 31% during the same period. Even this month, while its stock price remained steady, it significantly outperformed the KOSPI, which declined by 11%.

Doosan Enerbility manufactures essential equipment for nuclear power plants, such as reactor vessels. Recently, it has also gained attention for securing competitiveness in small modular reactors (SMRs), which are considered a next-generation energy source, in addition to conventional large-scale nuclear power plants. Expectations are rising that the company will benefit as global demand for nuclear power increases in the aftermath of the Middle East conflict. Kim Youngho, a researcher at Samsung Securities, explained, "Doosan Enerbility is expected to expand orders from large-scale nuclear power plants to SMRs. Recently, orders for liquefied natural gas (LNG) facilities have also increased, providing continued momentum for the stock price."

Other nuclear power-related stocks, such as Woori Technology and BHI, have also seen sharp increases in their share prices this month. Woori Technology, which supplies the Man-Machine Interface System (MMIS)—the "brain" of nuclear power plants—has soared by 40% in just this month. BHI, which manufactures balance of plant (BOP) equipment for nuclear power, also saw its stock price climb by about 8% in March.

Nuclear and Solar Power: Alternative Energy Stocks in the Spotlight

Amid instability in crude oil supplies, solar energy stocks have also drawn attention. OCI Holdings, which produces polysilicon—a key material for solar panels—is being highlighted as a major beneficiary of the recent strengthening of U.S. regulations on Chinese-made products. As the United States cracks down on Chinese solar panels, OCI Holdings, which has secured a supply chain for "non-Chinese polysilicon" centered on its plants in Vietnam and Malaysia, is raising expectations for improved performance.

Han Seungjae, a researcher at DB Financial Investment, commented, "Expectations for a rebound in the U.S. solar power market are rising, and demand for non-Chinese solar panels is surging due to tighter regulations. OCI Holdings is strengthening its non-Chinese portfolio by establishing wafer production facilities in Vietnam, and the price premium is expected to rise further in the second half of the year."

Other solar energy stocks, such as HD Hyundai Energy Solutions, which focuses on the solar module business, have also seen their share prices increase this month. Lee Euntaek, a researcher at KB Securities, analyzed, "Following the Iran crisis, soaring oil prices have heightened interest in energy self-sufficiency. Even after the situation ends, concerns over the Strait of Hormuz are likely to persist for some time, and the need for domestic energy generation through renewables such as solar power will only grow."

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