By Kwanwoo Jun


Posco Future M rallied Monday, leading the gains in South Korean battery-material stocks, after the U.S. introduced strict new rules targeting Chinese rivals.

Shares of the South Korean supplier of cathode and other key battery materials climbed 11% to close at 348,000 won ($268.76), outperforming the benchmark Kospi's 0.4% gain for the day.

The Biden administration on Friday issued new guidance that will restrict Chinese materials in electric-vehicle batteries available for U.S. tax credits.

Daishin Securities analyst Jeon Chang-hyun said in a research note Monday that the guidance will make companies owned or controlled by a "foreign entity of concern," such as China, ineligible for tax credits. That will allow South Korean competitors to strengthen further their dominance in the U.S. EV battery supply chain, he said.

The analyst said he expects Posco Future M and other South Korean battery-material suppliers to raise their stakes in existing joint ventures with Chinese partners, as the U.S. now views any company as ineligible for EV tax credits if an FEOC holds a stake of 25% or more in them.

The new FEOC rules will take effect in 2024 for finished battery products and in 2025 for battery minerals.


Write to Kwanwoo Jun at kwanwoo.jun@wsj.com


(END) Dow Jones Newswires

12-04-23 0347ET