South Korea's KOSPI hovered around the 7,000 line, supported by concentrated buying from institutions and other corporate investors amid concerns over widening Middle East risk. While Samsung Electronics (005930.KS), the market's largest company by capitalization, traded near flat, refining and chemical shares rallied as surging global energy prices for crude oil and natural gas boosted refining margins and tightened supply of petrochemical products.
The KOSPI was trading at 7,049.09 as of 1:24 p.m. on the 9th, up 94.57 points, or 1.36%, from the previous session, according to the Korea Exchange. The index, which had stalled just short of the 7,000 line the previous day, was moving around 7,050 as it attempted to hold the level. On the main board, individual investors sold a net 1.88 trillion won and foreign investors a net 119.4 billion won, while institutions bought a net 714.8 billion won. Share buybacks by Samsung Electronics and SK hynix (000660.KS) absorbed profit-taking.
The KOSDAQ was also on a steep upward path at the same time, rising 14.63 points, or 1.80%, to 826.51. On the KOSDAQ, foreign investors bought a net 176.5 billion won and institutions a net 23.2 billion won, while individuals were net sellers of 200.1 billion won.
Among large-cap chip stocks, performance diverged. Samsung Electronics fluctuated in slightly positive territory, up 0.37%, while SK hynix rose 3.35% to hold gains in the mid-1.8 million won range. Refining and petrochemical shares took the lead in afternoon trading. With West Texas Intermediate crude topping $93 a barrel and Brent approaching the $100 mark on military conflict in the Middle East, buying flowed in as signs of supply shortages emerged across petrochemical downstream markets, analysts said.
Gains were particularly sharp at pure petrochemical producers centered on naphtha cracking centers (NCC). Lotte Chemical (011170.KS) traded at 64,800 won, up 12.89% from the previous session, while Daehan Yuhwa (006650.KS) surged 11.23% to 108,000 won, both posting double-digit gains. Large refining and petrochemical stocks also advanced together, including SK Innovation (096770.KS), up 6.59%, S-Oil (010950.KS), up 4.71%, and LG Chem (051910.KS), up 3.52%.
Market participants say rising raw material prices are no longer merely a cost burden but have entered a phase where they translate into higher final product prices and wider margins. U.S. diesel prices jumped 60% over the past year to $5.9 a gallon, a record high, while China's seaborne crude imports in August rose 3% from July, pushing United Arab Emirates crude prices to $107 a barrel.
Ahead of winter in the Northern Hemisphere, European natural gas prices (Dutch TTF) stood at 74 euros per megawatt-hour and Northeast Asian LNG prices (JKM) at $24 per million British thermal units, each the highest since the end of 2022. European natural gas inventories falling to their lowest level since 2017 also stoked concerns over energy supply. In petrochemicals, monoethylene glycol (MEG) spreads soared to their highest since 2021, spreading expectations of improved profitability across olefin products including polyethylene (PE) and polypropylene (PP).
"U.S. diesel prices are hitting record highs day after day on a structural supply shortage, and with low European gas inventories, the risk has grown that shortages of both refined products and natural gas will hit simultaneously this winter," said Lee Choong-jae, an analyst at Korea Investment & Securities. "Following refining, a supply shortage has begun in the petrochemical market as well, led by MEG, and margin improvement is spreading across olefin products. Earnings turnarounds at Lotte Chemical and Daehan Yuhwa, the representative NCC companies, will begin in earnest."
