Korean energy, shipping, and renewable energy stocks rose on the 14th as Middle East war tensions escalated, with STX Green Logistics surging 29.99% and SK Innovation climbing 7.09%. The rally followed Iran Revolutionary Guard's announcement on the 12th (local time) that it would re-blockade the Strait of Hormuz after U.S. airstrikes on Iranian forces that attacked merchant vessels in the strait. The Strait of Hormuz, which previously carried one-quarter of global seaborne oil shipments before the U.S.-Iran war, is a critical maritime chokepoint whose closure drives up shipping rates and oil prices, with WTI crude futures rising over 4% to the mid-$70s per barrel in over-the-counter trading.
STX Green Logistics and Heung-A Shipping Rally on Strait Closure
STX Green Logistics closed regular trading at 2540 won on the previous day, up 586 won (29.99%), according to Korea Exchange data on the 14th. Heung-A Shipping rose as much as 15.42% intraday, though its closing gain narrowed to 0.87%.
STX Green Logistics had a market capitalization of just 14 billion won as of the 10th closing price, making it a small-cap stock. The company primarily operates bulk carriers transporting coal, iron ore, and agricultural products, with no direct connection to Middle Eastern straits. Heung-A Shipping's market capitalization stood at 414.6 billion won as of the 10th closing price, 30 times that of STX Green Logistics, with a free float ratio of 29.29%.
Heung-A Shipping's largest shareholder, Jang Geum Shipping, operates a fleet of approximately 130 tankers. The company expanded its fleet by purchasing used Very Large Crude Carriers (VLCCs) ahead of the U.S.-Iran war outbreak. Iran Revolutionary Guard stated on the 12th (local time) that it re-blockaded the Strait of Hormuz, claiming control rights under a ceasefire memorandum of understanding (MOU) with the United States. Iran also announced it attacked U.S. military facilities at Jordan's Prince Hassan Air Force Base.
SK Innovation and S-Oil Rise as WTI Crude Futures Jump 4%
SK Innovation surged 7.09% and S-Oil jumped 5.60% on the day as international oil prices rose. WTI crude futures rose over 4% in over-the-counter futures markets, reaching the mid-$70s per barrel.
Expectations of inventory valuation gains drove refining stocks higher. Inventory valuation gains represent book profits when the value of crude oil that refiners purchased and stored for processing increases. Conversely, refiners incur inventory valuation losses when international oil prices fall.
Lee Chung-jae, an analyst at Korea Investment & Securities, stated that "while international oil prices temporarily declined as petroleum inventory on tankers was released, refining margins continue to rise." He explained that "the scale of refinery facilities destroyed during the Iran war is known to be 3.5 million barrels per day" and noted that "the 1970s oil shock was resolved politically, but now it is being physically destroyed."
SK E&S and HD Hyundai Energy Solutions Gain on Renewable Energy Demand
SK E&S rose 12.14%, HD Hyundai Energy Solutions climbed 5.26%, and OCI Holdings gained 3.39% on the day. LG Energy Solution and Samsung SDI rose 0.77% and 1.38% respectively on expectations of increased demand for Energy Storage Systems (ESS) to supplement renewable energy's weather-dependent power generation variability. Both stocks reached intraday highs of 6.13% and 10.94% respectively before giving back most gains due to broader market selling.
FAQ
Q: Why did STX Green Logistics rise 29.99% on the 14th?
A: STX Green Logistics closed at 2540 won on the previous day, up 586 won (29.99%), following Iran Revolutionary Guard's announcement on the 12th (local time) that it would re-blockade the Strait of Hormuz. The company is a small-cap stock with a market capitalization of 14 billion won as of the 10th closing price.
Q: How much did WTI crude futures rise in over-the-counter trading?
A: WTI crude futures rose over 4% in over-the-counter futures markets, reaching the mid-$70s per barrel, after Iran announced the Strait of Hormuz re-blockade on the 12th (local time).
Q: What did the Korea Investment & Securities analyst say about refining margins?
A: Lee Chung-jae, an analyst at Korea Investment & Securities, stated that refining margins continue to rise and explained that the scale of refinery facilities destroyed during the Iran war is known to be 3.5 million barrels per day, noting that the situation is being physically destroyed rather than politically resolved.
