SK Innovation is surging more than 8% in early trading on the 1st following news that its subsidiary SK On has signed a large-scale supply contract.
As of 9:13 a.m., SK Innovation was trading at 136,000 won, up 15,000 won (8.37%) from the previous trading day in the KOSPI market. SK Innovation has continued its upward trend for four consecutive trading days.
SK On announced the day before that it had signed a supply contract for ESS battery cells with U.S. ESS company NeoVolt Power. Through this contract, SK On will supply a total of 9GWh (gigawatt-hours) of LFP (lithium iron phosphate) pouch battery cells to NeoVolt Power annually from next year through 2031, spanning five years. Industry sources estimate the value of this contract at approximately 1.5 trillion won. Through this order, SK On has secured a long-term supply channel for North American ESS LFP batteries.
Yu Jin-jin, a researcher at iM Securities, stated, "While the ESS contract is absolutely insufficient to resolve concerns and anxieties regarding support for SK I&T (SKIET), it is encouraging that this marks the first step toward entering the U.S. ESS market." He added, "Furthermore, with continued strength in refining margins and lubricants in the second half of the year, expectations for SK Group's investment in AIDC, and the possibility of SK On's expansion into the energy sector through investments in the United States remaining valid, this can be interpreted as a positive event that slightly alleviates disappointment over the SKIET merger."
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