Nuclear power stocks in Korea rally on China's $440 bn plan to add 150 reactors

Nuclear reactor-related stocks in South Korea have gained upward momentum upon news that China is planning on a $440 billion-project to build at least 150 nuclear reactors across the country over the next 15 years to reduce carbon emissions and deal with power shortage.

Shares of Doosan Heavy Industries & Construction Co. gained 6.71 percent to close at 26,250 won ($22) on Thursday. KEPCO Engineering & Construction Co., a nuclear reactor developing unit of KEPCO, soared 23.9 percent to 87,600 won. In Friday morning session, Doosan Heavy edged down 0.57 percent to 26,100 won and KEPCO E&C 0.8 percent to 86,900 won.

Iljin Power, an exporter of nuclear reactor equipment, jumped 17.24 percent to 20,400 won on Thursday. Hanshin Machinery who has a Chinese subsidiary in Qingdao ended the day with a 4 percent gain at 4,415 won. Woojin under partnership with China’s CST Group for nuclear projects added 3.54 percent to 9,650 won. KEPCO Plant Service & Engineering (KPS) increased 7.57 percent and BMT 7.23 percent.

The category stocks jumped on Bloomberg report that “China is planning at least 150 new reactors in the next 15 years, more than the rest of the world has built in the past 35,” a project to be valued at as much as $440 billion. “As early as the middle of this decade, the country will surpass the U.S. as the world’s largest generator of nuclear power,” it added.

The U.S. has 93 reactors in operation and two under construction. Bloomberg estimated the goal to add 147 gigawatts of atomic power in China by 2035 would cost between $370 billion and $440.

China, the world’s biggest carbon emitter, aims to cut emissions by increasing its reliance on low-carbon nuclear power. Nuclear power plants produce no greenhouse gas emissions during operation, thus they are emerging as a solution to climate change and energy shortage.

The cost of building a nuclear reactor in China is also much cheaper than that in any other countries. According to the World Nuclear Association, China’s state banks provide cheap loans to nuclear power developers, helping them build a reactor at one third of the cost they would spend in other countries such as the U.S. or France.

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