Steel stocks are surging early on expectations they will benefit from Iran's reconstruction. The rise appears to reflect hopes that large-scale infrastructure restoration demand will emerge after the United States and Iran agreed to sign a memorandum of understanding (MOU) to end the war.
As of 9:47 a.m. on the 17th, Moonbae Steel and NEXTEEL are trading at 2,660 won and 16,990 won, up 440 won (19.82%) and 1,850 won (12.47%), respectively, from the previous session. HISTEEL and AJU Steel are both locked at the upper limit, and steel and steel pipe-related stocks such as Keumkang Steel, Dongil steelux, and KBI Dong Yang Steel Pipe are also rallying together.
This appears to reflect expectations that Iran's reconstruction could kick into full gear after the United States and Iran agreed to sign a memorandum of understanding (MOU) to end the war. According to foreign media, the draft agreement being pursued by the two countries is said to include plans to create a reconstruction and development fund of about $300 billion (about 454 trillion won).
Steel is considered the key material deployed first in reconstruction projects. That is because large steel demand arises not only for buildings, roads, and bridges, but also during the restoration of refineries, power plants, and logistics infrastructure.
In particular, the market is focusing on demand for steel pipes used in restoring energy facilities. If efforts move forward to repair war-damaged refineries, oil pipelines, and oil field facilities, expectations are rising that orders for energy steel pipes (OCTG) and heavy plate and other related products could increase.
Accordingly, not only steelmakers but also corporations producing steel pipes are emerging as reconstruction beneficiaries, drawing a rush of buying from investors.