Korean nuclear power stocks rose across the board after the unveiling of a $200 billion (about 271 trillion won) blueprint for investment in the United States. With the Korean-designed APR1400 reactor included among eight large reactors to be built in the U.S., expectations grew that Korean companies would take part in design, equipment supply and construction. A planned acquisition of a stake in Westinghouse also lifted hopes for expanded nuclear exports.
Wonil T&I closed at its upper limit of 10,850 won the previous session, the Korea Exchange said on Oct. 2. Withtech rose 4.72%, Vitzro Tech 3.48%, Orbitech 3.46% and KEPCO Engineering & Construction 2.61%. KEPCO Plant Service & Engineering and Doosan Enerbility each gained 1.03%.
The rally was attributed to the U.S. investment project disclosed by President Donald Trump on Sept. 30. Trump said the Korean government would invest up to $200 billion to build 6 gigawatts of power generation capacity, eight large nuclear reactors in Texas and a liquefied natural gas pipeline in Alaska. The Korean government also plans to acquire a 5% to 10% stake in Westinghouse.
Analysts said the announcement gives shape to nuclear projects in the U.S. and broadens the growth base for Korean nuclear companies. "This announcement has given concrete form to the nuclear business within the U.S. investment project," said Lee Sang-heon, an analyst at iM Securities. "The influence of the U.S. investment project on nuclear stocks will continue going forward."
Expectations were lifted in particular by the fact that two of the eight large reactors to be built in the U.S. will be APR1400 units. "This means there is a possibility that the APR1400's market share will expand over the medium to long term," said Lee Min-jae, an analyst at NH Investment & Securities. "If APR1400 construction proceeds, KEPCO Engineering & Construction can participate in design, Doosan Enerbility in core equipment including the reactor, and Korean builders in construction."
Completion of the Westinghouse stake purchase is expected to strengthen nuclear cooperation between Seoul and Washington. Combining Korea's strength in engineering, procurement and construction with policy coordination with the U.S. could ease export restrictions not only in the American market but also in Europe and elsewhere.
Optimism over the U.S. investment spread to steel shares. Daehan Steel closed at 9,100 won, up 1,310 won or 16.82% from the previous session. Kiswire rose 5.02%, SeAH Besteel Holdings 4.56% and Dongkuk Steel 4.55%.
Steel and steel pipe shares saw volatility widen during the session, however, amid uncertainty over participation in the Alaska LNG project. Trump spoke of Korean involvement as settled, but the Ministry of Trade, Industry and Energy said it had only begun reviewing the matter and that nothing had been decided on whether to invest or on the size of any investment. Some steel pipe stocks that had risen alongside steel shares turned lower during the day. "Steel and steel pipe shares rose on the Alaska LNG investment plan, but volatility widened as questions were raised over whether it would be confirmed and over its profitability," said Kim Ju-yeon, an analyst at Mirae Asset Securities.
