Lotte Chemical Slides 16.34% as Profit Turnaround Fails to Ease Margin Doubts

Lotte Chemical, South Korea’s second-largest petrochemical company, closed at 89,100 won on May 12, down 16.34% from the previous session on the Korea Exchange. The stock had risen 6.61% a day earlier after the company reported strong first-quarter results, but it gave back more than twice that gain in one session. Lotte Chemical posted first-quarter revenue of 4.9905 trillion won and operating profit of 73.5 billion won. Revenue rose 1.8% from a year earlier, and the company returned to operating profit for the first time in 10 quarters, since the third quarter of 2023. Analysts said much of the improvement came from a reversal of inventory valuation losses and positive lagging effects after a sharp rise in naphtha prices. Market views were split on whether petrochemical supply and demand would structurally improve after the Middle East war or whether the gains were only inventory-related. hankyung.com reported that forecasts for whether profit would continue in the second quarter were also divided.