Investors trading shares of KGHM Polska Miedź will not consider the last sessions successful.
Red Wednesday on the Warsaw floor
On Wednesday morning, nerves took over the charts, and the stock price dipped to 297.70 PLN at market close.
This represented a sharp discount of almost 7%, the lowest valuation of the copper conglomerate since the end of April this year (after adjusting for a 1.50 PLN per share dividend correction).
KGHM unambiguously earned the title of the weakest link in the WIG20 index, which at the same time lost about 1% and fell to 3605 points.
The elite club of the twenty largest companies was dominated by minor moods. Only three companies managed to withstand the selling wave and were in the green. They were Orlen, Allegro, and PKO BP. The rest of the market obediently succumbed to global pessimism that spread across world exchanges.
It is worth remembering that at the beginning of this year KGHM was an absolute hit on the Warsaw exchange, regularly breaking historic records. The main reason for these spectacular rises was the combination of the company’s own strategy with the geopolitical situation. Today’s outlook, however, looks much less rosy.
Although the company has been up by 8.2% since the start of the year, the last month brought a painful drop of 10.3%. In comparison, the broad index WIG20 performed more steadily over the same period, recording a rise of 0.6% and 14.7%.
The most painful fact for shareholders is that since mid‑June, when the price was 394.7 PLN, the valuation has already fallen by 24%.
The current market capitalization of the company has fallen to 60.5 billion PLN.
Chart. KGHM Polska Miedź share price
Source: TradingView.
See also: KGHM Polska Miedź shares surprise! The company’s breakthrough agreement with the GPW goes public
Middle Eastern fire douses market enthusiasm
Why is the commodity giant losing ground when it was so good just a moment ago? The answer lies in global commodity markets.
Copper price, the foundation of the Lubin group’s business, is falling. Investors are feverishly analyzing how the escalation of armed conflict in the Middle East will affect global energy supplies and appetite for risky assets.
In London on the LME copper in 3‑month supplies fell in the morning by 0.2%, reaching 13,335 USD per ton. In New York on Comex the copper pound cost 6,210 USD (down 0.26%), and the Chinese market in Shanghai (SHF) quoted a price of 102,950 CNY per ton.
During the day the avalanche accelerated, and the commodity discount deepened to a range between 2% and 3.5%. Silver, of which KGHM is a powerful producer, was also hit hard. Its price fell by more than 3%.
The direct trigger for market bears was reports of a US military operation. Overnight from Tuesday to Wednesday, the US CENTCOM carried out a series of strikes on more than 80 targets in Iran. It was a retaliation for Iranian attacks on commercial vessels in the strategic Strait of Hormuz.
The Americans destroyed radars, air defence systems, and more than 60 small boats belonging to the Islamic Revolutionary Guard Corps.
The situation was further complicated by statements from Donald Trump, suggesting that the US might not respect the ceasefire, which immediately pushed oil prices up and increased market uncertainty.
Source: Trading Economics.
Important for KGHM Polska Miedź listings is also the silver price, which after recent falls currently hovers around 59 USD per ounce.
Source: Trading Economics.
See also: KGHM Polska Miedź shares surprise investors! Employees could even receive 180% of a monthly salary
Bills on the table and a new era 2055+
Despite market turbulence, KGHM authorities are trying to remain calm and play long‑term.
A few days ago the group officially adopted a new, highly ambitious strategy under the banner "2055+". President Remigiusz Paszkiewicz reassured at a conference that KGHM intends to maintain its status as a dividend company, and the gigantic investment outlays may increase further if opportunities for interesting mergers and acquisitions arise (M&A).
In the horizon of 2026‑2030, KGHM plans to spend an astonishing amount of over 32 billion PLN on investments. The plan is clearly specified: nearly 80% of these funds will go to tangible investments in Poland, strengthening the Main Technological Thread and national subsidiaries.
The remaining 20% of the budget will support foreign assets, i.e., KGHM International projects and the Sierra Gorda mine. The question is whether these impressive plans will convince investors to return to the copper ship before global geopolitics strikes again.
See also: KGHM Polska Miedź shares crashed. The surprise will come only later? The company’s plans revealed
Source: StockWatch.
