[Click eStock] "Copper Prices Near Historic Highs, Pungsan Stock Expected to Rebound Quickly"

[Asia Economy Reporter Ji Yeon-jin] Kiwoom Securities announced on the 14th that it maintains a buy investment opinion and a target price of 50,000 KRW for Pungsan, expecting a rapid rebound in Pungsan's stock price along with a rise in copper prices.

Jonghyung Lee, a researcher at Kiwoom Securities, stated, "Pungsan's non-ferrous metal business profitability is influenced by the direction of copper prices, so its stock price moves in tandem with copper prices, but the beta (β), which indicates relative volatility, is greater than that of copper prices. Although copper prices approached the historic high from May last year again, Pungsan's stock price is still more than 20% lower compared to the May high last year. This contrasts with the stock price of Freeport McMoRan, a leading U.S. copper mining company, which has recovered its previous high from last year."

As of the 12th, the 3-month copper futures price was $10,064, reclaiming the $10,000 level within three months and approaching the historic high of $10,460 recorded on May 11 last year. Recently, copper prices have been rising again, supported by improvements in Chinese economic indicators and expectations of economic recovery, Europe's power shortages, concerns over supply disruptions due to Indonesia's mineral export restrictions, and market-friendly remarks by Jerome Powell, Chairman of the U.S. Federal Reserve (Fed), during his hearing.

Copper prices rose after the outbreak of COVID-19 along with the global economic recovery, reaching a historic high in May last year for the first time in about 10 years. However, due to the Chinese government's direct intervention in the raw materials market to curb inflation, the end of economic stimulus, and a shift to tightening policies leading to a slowdown in China's economic momentum, copper prices failed to continue rising and remained stable around $9,000 for more than six months.

However, it is forecasted that the copper price rally will resume in the first quarter of this year. Researcher Lee explained, "Starting from the fourth quarter of last year, the Chinese government began economic stimulus through easing real estate regulations and expanding liquidity, and China's economic momentum is expected to recover from the first to the third quarter of this year. Additionally, Chinese inflation indicators such as PPI and CPI began to decline after peaking in the fourth quarter of last year, increasing the likelihood of easing government pressure on the raw materials market." He also projected that the expansion of production cuts by European non-ferrous metal companies due to power shortages and soaring energy costs will stimulate upward pressure on non-ferrous metal prices.