Yamato: LG Chemical's first quarter earnings are expected to be minimally impacted by the conflict in the Middle East.

Henny Jung and Yoonki Bae of Yamato Capital expressed that the earnings for LG Chem in the first quarter are expected to be minimally affected by the Middle East conflict. These analysts wrote in a report that the geopolitical tensions have raised expectations of a recent shortage of naphtha, leading to a recent increase in stock prices in the sector. However, they caution that the fundamentals of petrochemical products remain weak, and a mild improvement is expected in the first quarter. They point out that this South Korean chemical company has about a month's worth of naphtha inventory, and difficulty in procurement may lead to a decrease in factory utilization rates in the second quarter. They warn against being overly optimistic.