22 January 2008 10:00 [Source: ICIS news]
(Recasts story, adds details on petrochemicals and closing stock prices)
SINGAPORE (ICIS news)--Petrochemical stocks across Asia plunged for a second consecutive day on growing fears of a global recession, dragging crude oil prices further down from record highs.
Stock markets in
The Korea Composite Stock Price Index (KOSPI) slid 4.4% while Japan's Nikkei 225 slumped 5.7%.
In the greater
Honam dived 12.2% to won (W) 77,000 ($81.20) while LG Chem fell 9.6% to W7,100. PetroChina tumbled 14.9% to
While fundamentals for some Asian petrochemical companies were still strong, the
Weak demand could become another burden for the petrochemical industry which was already weighed down by high crude oil costs, he said.
However, crude oil prices were expected to stabilise at $80/bbl because of the overall weak market conditions, he added.
NYMEX crude futures fell to below $87/bbl during intra-day trade, the lowest level since December, dragging down naphtha and aromatics values.
US crude futures for February fell to $86.69/bbl, down $3.88/bbl from Friday. March BRENT futures were down $1.95/bbl to $85.56/bbl.
Naphtha buy-sell ideas slipped to $840-841/tonne CFR (cost and freight)
However, one trader said it was unlikely that naphtha would fall very sharply, to November’s low levels.
“The crack spread [the spread between crude and naphtha] is still quite good, so we don’t anticipate a very sharp fall in naphtha,” he said.
The Asian jet kerosene market has also softened, on the back of declining crude and weaker demand. Traders said that FOB (free on board)
Tight olefins supply kept prices high, producers and traders said. Ethylene selling indications were above $1,470/tonne FOB
Propylene producers reiterated selling indications above $1,300/tonne CFR northeast Asia (
As some aromatics makers were just breaking even, the limited downside prevented prices from falling further, said a Daewoo trader.
Toluene bids for any March cargoes were pegged at $900-905/tonne FOB
Benzene offers fell $5/bbl to $1,005/tonne FOB
Styrene monomer (SM) was stable-to-soft $1,345-1,355/tonne CFR China, losing some $5/tonne from the previous day and paraxylene (PX) prices were assessed notionally unchanged at $1,115-1,125/tonne CFR Taiwan.
April crude palm oil (CPO) futures in Malaysia plunged ringgit (M$) 133/tonne ($40/tonne) to M$3,110/tonne by mid-day amid plummeting mineral oil prices, profit-taking before the public holiday in Malaysia on Wednesday and panic selling by speculators.
“Everybody was shouting for corrections after palm oil prices went over M$2,500/tonne,” Akshay Khandelwal, a Singapore-based palm oil trader said, adding that the current dive in prices was long overdue, and should not be completely blamed on the fall in crude oil prices.
Prema Viswanathan, Kew Jiahui, Helen Lee, Wan Hsin Hun, Serene Cheong, Salmon Aidan Lee, Hong Chou Hui and Jeremiah Chan contributed to this article
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