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[Alpha Biz=(Chicago) Reporter Kim Jisun] Korea Zinc, which has increased its cost burden due to higher electricity bills, has decided to expand its share of power generation from this year.
According to the metal industry on the 18th, Korea Zinc will secure more than half of its power through the Ulsan Onsan Smelting Plant's Liquefied Natural Gas (LNG) complex power plant starting this year. To this end, it is expected to double its operation rate from last year. Korea Zinc invested about 215 billion won to complete the LNG complex power plant with an annual power generation capacity of 250㎿ (megawatt) in 2021.
The reason why Korea Zinc is expanding its own power generation is because electricity prices rose sharply. Korea Zinc's electricity consumption last year was 23,123TJ, 8.6% (2,177TJ) less than 2021. However, during the same period, the power cost of Korea Zinc increased by 4.6% (8.9 billion won) to 203.3 billion won. This is due to an increase of 19.3 won per ㎾h (kilowatt hour) and about 20% over three times in April, July, and October last year.
In particular, the cost burden increased further as product prices declined. Zinc prices on the London Metal Exchange (LME) exceeded $ 4,500 per ton in April last year, but are now moving around $ 2,900 per ton.
The drop in LNG prices also increased the incentive for Korea Zinc to raise the operation rate of the LNG complex power plant. Korea Zinc was forced to limit the portion of its own power generation after LNG prices soared after the Russia-Ukraine War.
According to raw material price information from the Ministry of Trade, Industry and Energy, LNG imports reached $ 916.2 per ton as of last month, the lowest since July last year. This year alone, it has decreased by 29.3% ($379.4).
AlphaBIZ 김지선(stockmk2020@alphabiz.co.kr)
