Korea Zinc Earnings Soar on Higher Base Metal Prices

Korea Zinc is expected to post strong earnings in the second quarter of this year, thanks to higher prices for base metals like zinc and copper. Despite a correction in silver prices, which had driven first-quarter earnings growth, the company's operating profit is still projected to rise sharply.

According to Shinhan Investment & Securities, Korea Zinc's consolidated sales for the second quarter are expected to reach 6.0025 trillion won, up 56.9% from a year earlier. Operating profit is forecast at 597.7 billion won, a significant increase of 130.9%. Meritz Securities also issued a positive outlook, forecasting second-quarter operating profit of 563.6 billion won, up 117.7% year on year.

The rise in base metal prices and a stronger won against the dollar have offset the decline in precious metals segment. Zinc and copper prices rose 7.1% and 3.8%, respectively, from the previous quarter, while the won-dollar exchange rate climbed 1.9%. Improved performance from byproducts and overseas subsidiaries also supported growth.

The gross margin on semiconductor sulfuric acid has increased to around 10% in the first half of this year, up from the 2-3% range previously. The Australian smelting subsidiary Sun Metals Corporation (SMC) and the U.S. e-waste recycling subsidiary Pedalpoint Holdings have also begun to stabilize.