Daehan Electric Wire & Cable is showing strong performance. The rise in copper prices and the expected benefits from increased demand for replacing aging power grids appear to be influencing the stock price. According to Shinhan Investment Corp., global power grid investment is projected to increase more than 2.7 times from $235 billion in 2020 to $636 billion in 2050.
As of 10:23 AM on the 5th, Daehan Electric Wire & Cable is trading at 13,500 KRW, up 18.21% from the previous day.
Copper prices recorded $9,328 per ton on the LME futures market the previous day, marking the highest level since January 2023. The recent rise in copper prices is largely due to supply factors, including the closure of large-scale mines in Panama and Peru and production cuts at Chinese smelters. Kwansoon Choi, a researcher at SK Securities, analyzed, "The rebound in PMI in the US and China reflects expectations for economic recovery. The spot price, at $9,150 per ton, shows a widening gap with futures prices, indicating a high possibility of further increases."
According to data released by the International Energy Agency, the sector with the largest increase in energy demand from 2015 to 2022 was cryptocurrency mining. The sector consuming more than twice the energy of cryptocurrency mining is data centers. As of 2022, data centers consumed 340 TWh of energy, which is about half of South Korea's annual electricity sales. If the scale of data centers expands and AI-dedicated data centers are established, electricity consumption is expected to increase further.
Daehan Electric Wire & Cable recently secured a project worth approximately 110 billion KRW to replace aging power grids in the United States. This is the largest single order since entering the US market. The company has recorded cumulative orders of about 200 billion KRW in the US this year.
The project involves replacing aging power grids with new ones to prepare for increased electricity demand in the southeastern Florida region of the US. Daehan Electric Wire & Cable will remove existing cables and supply a 230-kilovolt (kV) ultra-high voltage power grid on a "full turnkey" basis. Full turnkey refers to a business model that performs all tasks from power grid design to production of cables and connectors, electrical work, civil engineering, and testing.
Daehan Electric Wire & Cable is also expecting additional orders. More than 50% of the US transmission power grid has exceeded the replacement cycle after 40 years of installation.
A representative from Daehan Electric Wire & Cable stated, "In the US, large-scale projects to replace aging power grids are continuing due to rapidly increasing power demand driven by AI, semiconductor growth, and expansion of renewable energy. We expect to continue delivering results in line with the market expansion trend."
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