YoulChon Chemical stock plunges on contract termination news

YoulChon Chemical Co. CI

The stock price of YoulChon Chemical Co. a packaging material manufacturing company in South Korea, plummeted to the lower limit immediately after the market opened on Wednesday, following the news of the termination of a significant contract worth about 1.4 trillion won ($1.01 billion) with battery manufacturer Ultium Cells LLC.

Shares of Youlchon Chemical were trading at 24,500 won as of 11:18 a.m., 18.6 percent from the previous day. Shortly after the market opened, the stock hit its price limit, falling by 29.9 percent to 21,100 won.

Before the market opened, Youlchon Chemical announced the termination of a supply contract for aluminum pouches worth $1.04 billion with Ultium Cells, a joint venture between General Motors Corp. (GM) and LG Energy Solution Ltd. signed on September 28, 2022.

Meanwhile, Lotte Chilsung’s stock price surged by more than 5 percent, driven by expectations of continued strong performance.

As of 11:19 a.m., Lotte Chilsung shares were trading at 141,900 won, up 4.96 percent from the previous session.

After the market closed the previous day, Lotte Chilsung reported that its consolidated sales for the second quarter of this year increased by 38.1 percent year-on-year to 1.09 trillion won, marking the first time quarterly sales exceeded 1 trillion won.

Hanmi Semiconductor Co., noted as a beneficiary of Nvidia Corp.’s AI chip sales, lost ground on Wednesday morning.

As of 11:21 a.m., Hanmi Semiconductor was trading at 126,300 won, down 1.86 percent from the previous session. The stock has been on a downward trend, falling 27 percent this month alone. Compared to its peak of 196,200 won on June 14, the stock has declined by 36 percent.

This decline is attributed to Nvidia’s overnight drop of 7.04 percent, influenced by concerns over an overheating AI market in the U.S. and news that Apple will use Alphabet’s AI chips for its AI model training instead of Nvidia’s.