Summary
- Shares tied to oil, shipping and anti-plastic themes that had surged during the war plunged on news of a ceasefire agreement between the US and Iran.
- War beneficiaries including Joongang Enervis, Heunggu Oil, Heung-A Shipping, Serim B&G and Jinyoung all posted double-digit declines.
- HMM Co., Pan Ocean Co. and Korea Line Corp., by contrast, closed higher as expectations for a recovery in cargo volumes through the Strait of Hormuz and improved profitability for shippers came into focus.
Forecast Trend Report by Period
Oil, shipping and anti-plastic theme stocks that had surged during the war tumbled after news that the US and Iran had agreed to a two-week ceasefire. The selloff came as international crude prices fell sharply and hopes rose that supplies of petrochemical feedstocks such as naphtha would improve as an end to the conflict came into view.
According to the Korea Exchange, Joongang Enervis and Heunggu Oil closed 17.65% and 17.55% lower than the previous session at 19,970 won and 18,840 won, respectively, on July 8. The two stocks were seen as oil and gas plays early in the conflict as fears mounted over disruptions to global crude supply. Joongang Enervis rose as high as 32,800 won this month, while Heunggu Oil climbed to 32,700 won.
Shipping stocks moved in different directions by business line. Heung-A Shipping, which had gained during the war on expectations freight rates would rise if the Strait of Hormuz were blocked, fell 21.21% to 2,990 won on July 8. HMM Co., Pan Ocean Co. and Korea Line Corp., by contrast, closed higher as expectations grew for a recovery in cargo volumes through the strait.
Shares of companies tied to alternative materials, including anti-plastic and paper packaging themes, also sank. Those stocks had held onto gains on the prospect that plastic raw material prices would rise because of uncertainty over naphtha supply. Eco-friendly packaging maker Serim B&G and industrial waste recycler Jinyoung dropped 19.33% and 18.51%, respectively, on July 8.
Industry participants expect shipping companies' profitability to improve, with supply-chain realignment and vessel shortages set to persist for some time even after the ceasefire.
Bae Seong-su, Hankyung.com reporter baebae@hankyung.com
Korea Economic Daily
hankyung@bloomingbit.ioThe Korea Economic Daily Global is a digital media where latest news on Korean companies, industries, and financial markets.
