[Click eStock] "Unid, Favorable Oil Prices and Tariffs"

On the 5th, IBK Investment & Securities analyzed that Unid is highly likely to deliver solid performance during periods of falling oil prices, and there is potential for prices to rise due to U.S. tariff impositions. The investment opinion 'Buy' and the target stock price of 100,000 KRW were maintained.

Unid, a leader in the domestic potassium-based chemical products market, primarily produces caustic potash, an inorganic chemical product. When global trade disputes intensify and crude oil price volatility increases, prices of general organic chemical products tend to be sensitive. However, inorganic chemical products such as caustic potash, derived from minerals, have relatively low sensitivity to oil prices.

Analyst Dongwook Lee stated, "Since 2010, the coefficient of determination between oil prices and domestic caustic potash prices is 0.28, indicating a very low correlation," and analyzed that "Unid is likely to maintain better performance compared to other petrochemical companies during periods of declining oil prices."

Recently, the rise in domestic and international potassium chloride prices is also a positive factor. Due to the peak season effect, potassium chloride demand in China has increased, causing prices within China to rise by 26-27% in February alone. Major potassium producer Belaruskali is reducing potassium chloride production by 1 million tons (about 1.3-1.4% of global demand) during the first half of this year for infrastructure maintenance, which is also driving the rebound in potassium chloride prices. Domestically, cargo supply remains limited, potentially causing potassium chloride shortages until April.

U.S. tariff impositions are also affecting prices. The U.S. imports approximately 12 million tons of potassium chloride annually from Canada. Additional import price increases are expected due to tariffs imposed on Canadian products.

Meanwhile, Unid's market dominance in China is expected to rise. The Hubei Province Yichang project in China has entered full operation, responding to market demand in central and western Chinese regions such as Guangdong, Chongqing, Sichuan, and Jiangxi. Unid plans to expand its Chinese production capacity to 500,000 tons by 2027 by adding an additional 90,000-ton caustic potash plant.