23 January 2008 10:49 [Source: ICIS news]
(updates closing share, oil and naphtha prices in paragraphs 4-9, 12 and 15)
By Jeanne Lim
SINGAPORE (ICIS news)--Asia-Pacific petrochemical stocks bounced back on Wednesday from a two-day meltdown as the US Federal Reserve’s move to cut interest rates boosted investor sentiment.
In a rare policy move outside of its ordinary meetings, the Federal Reserve cut interest rates by 75 basis points to 3.5% on Tuesday, its biggest cut in more than 23 years.
By lowering borrowing costs, such a move should help industry by boosting spending as well as lowering investment costs, and possibly stave off an ?xml:namespace>
Japanese chemical stocks ended 2-3% higher as the Nikkei 225 index closed 2% up at 12,829.06 points.
The share price of chemical major Asahi Kasei closed 2.4% higher after gaining as much as 5.4% earlier in the day while Mitsubishi Chemical and Mitsui Chemical stocks closed at 2.3% and 2.9% respectively.
The shares of Chinese state-owned refiners PetroChina and Sinopec continued their upward trend and closed 17.5% and 17.6% higher respectively as
The Standard & Poors/Australia Stock Exchange (ASX) 200 index jumped 4.4% to close at 5,412.30 points while the Stock Exchange of Thailand (SET) index recovered from earlier losses to close 2.8% higher.
In South Korea, the Korea Composite Stock Price Index (KOSPI) ended 19.4% higher but stocks of chemical majors such as LG Chemical and Hanwha Chemicals saw their stock price end 1.2-3.8% lower respectively.
SK Energy’s share price closed 3.8% lower after rising slightly in the day while Honam Petrochemical’s stock continued its rise to close higher at 3.8%.
The Federal Reserve interest rate cuts could have boosted market sentiment in
“I think the interest cuts could not remove all the concerns of the market for the time being. Particularly in the first quarter, the stock market will maintain its weak trend,” he added.
Crude oil hovered near $89/bbl, attempting to consolidate a nervous recovery after the
Asian naphtha markets picked up a little, tracking the $3/bbl rebound in crude values.
Discussion levels for second half March naphtha cargoes were heard at $831-834/tonne CFR (cost and freight)
Asian naphtha was traded at $837-839/tonne CFR Japan for second-half March open spec grades.
Some traders were, however, worried that if the
Prices fell $38/tonne on Tuesday, following the stock market meltdown.
The Asian toluene market was quiet on Wednesday following the $15/tonne erosion of offers to $905/tonne FOB (free on board)
However, traders anticipate prices to firm slightly on Wednesday on the back of stabilised crude values and modest overnight gains in the
A higher offer emerged mid morning at $920/tonne FOB
But trade was scant as the
Meanwhile, a South Korean polyethylene terephthalate (PET) producer said that there had been no effect on prices so far on steadying crude values.
“Crude will impact on raw material one month later usually. Our deals have been concluded at lower prices because bid prices are decreasing. Demand is weak,” he said.
Another southeast Asia-based orthoxylene (OX) trader added that he didn’t think that the interest rate cut would have any impact on the market.
($1 = €0.68)
Helen Lee, Prema Viswanathan and Hong Chou Hui contributed to this article
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