Kolon Industries surged after reports that a competitor’s production facilities for modified polyphenylene oxide, or mPPO, had halted operations.
According to the Korea Exchange, Kolon Industries was trading at 103,500 won as of 10:23 a.m. on the 28th, up 13,500 won, or 15.00%, from the previous session. The stock rose as high as 104,900 won early in the session, setting a new one-year high.
Foreign media reported the previous day that a polyphenylene ether (PPE) resin plant operated by Saudi petrochemical giant SABIC has been shut since early April following Iranian airstrikes. PPE resin is the key feedstock for modified PPE, or mPPO. SABIC is a major supplier, accounting for about 70% of global PPO resin production.
With supply disrupted, prices for related materials have also jumped. PCB prices in April were reported to have risen by as much as 40% from the previous month.
The outage has raised expectations that substitute demand could shift to Kolon Industries’ mPPO, a competing product.
Cho Hyun-ryeol, an analyst at Samsung Securities, said the situation could push Kolon Industries’ new plant utilization higher than expected. He said SABIC’s share had been dominant in the mPPO market for artificial intelligence copper-clad laminate, or CCL, resins, and that multiple CCL makers may seek additional capacity as part of efforts to diversify supply chains.
Kolon Industries’ mPPO capacity was equivalent to 80 billion won in annual sales as of last year, and is expected to rise to 160 billion won once its new Gimcheon Plant No. 2 is completed. The company expects mechanical completion of the Gimcheon facility by the end of the second quarter this year.
* This article has been translated by AI.
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