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Battery stocks stage sharp rebound after two years of slump
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By Jun Ji-hye
Battery-related stocks, which had been on a downward trend for the past two years, have started a clear rebound this month, analysts said Friday.
They noted that the sector’s earnings and stock prices are likely to continue their upward movement, supported by improving profits and favorable supply-demand factors.
After steadily declining since July 2023, battery stocks began to recover in May this year and have shown explosive gains this month.
According to the Korea Exchange, EcoPro, the leading battery stock, has risen more than 70 percent on the Kosdaq this month. During the same period, POSCO Future M also gained over 40 percent on the KOSPI.
Battery-related stocks maintained their strong performance, Friday.
While EcoPro rose 8.34 percent on the Kosdaq, SK Innovation, LG Energy Solution and Samsung SDI increased 8.27 percent, 9.94 percent and 13.57 percent on the KOSPI, respectively.
The Kosdaq rose 11.05 points, or 1.27 percent, to close at 883.08, while the KOSPI gained 96.03 points, or 2.5 percent, to close at 3,941.59.
Battery stocks had seen a rapid accumulation of short positions amid concerns over weak industry outlook, causing their lending ratios to rise sharply. In this environment, a rebound in stock prices triggered a short squeeze, where buying surged as short sellers closed their positions, fueling further gains.
Stocks with high lending ratios have risen 40 to 70 percent since the start of October.
Kang Jin-hyuk, an analyst at Shinhan Securities, highlighted several factors supporting improvements in profits and supply-demand dynamics for the battery sector, including China’s supply-side reforms, growth in the energy storage systems (ESS) market and progress in U.S.-Korea tariff talks.
“Industrial restructuring in China, prompted by government concerns over battery oversupply, is easing worries about falling prices. BYD has recently reduced output at certain domestic factories by over 30 percent,” Kang said.
He added that advancements in the talks for the $350 billion U.S. investment fund, a key point in follow-up negotiations between Seoul and Washington, are favorable, as companies could expand access to the U.S. market and strengthen supply chain stability.
“This month has seen coordinated buying by foreign and institutional investors, and combined operating profits are expected to turn positive starting in the third quarter and continue to grow,” he said.