Asia petchem stocks gain despite bleak outlook

05 January 2009 11:36  [Source: ICIS news]

SINGAPORE (ICIS news)--Asian petrochemical stocks rose in tandem with regional equities markets as investors welcomed the new year in cheerful spirits despite expectations that 2009 would be a difficult year.

Waning demand for petrochemicals as economies struggle to post growth would continue to exert pressure on product prices, which plumbed multi-year lows towards the late second half of 2008, market players said.

“Demand (for petrochemicals) might be difficult to improve in the first half of 2009,” said Wang Xixin, an analyst at Wuxi-based Guolian Securities.

“Year 2009 is a tough year for chemical companies, [since they are] plagued by increasing new capacities and shrinking demand,” said Wang.

At the close of trading, Japanese petrochemical majors gained, with Mitsui Chemicals up 1.21%, Mitsubishi Chemical jumping 5.34% and Asahi Kasei rising 2.30%.

Japan’s Nikkei 225 gained 2.07% to close at 9,043.12, crossing back above the psychologically important level of 9,000, which was broken in November 2008.

China’s state-owned refiners Sinopec and PetroChina jumped 6.05% and soared 6.94% respectively, as the benchmark Hang Seng index rallied 3.46% to 15,563.31.

South Korea’s petrochemical majors also advanced, with Hanwha Chemical up 3.77%, SK Energy 2.22% higher and LG Chemical up 4.39% as the KOSPI composite index closed 1.40% higher at 1,173.57.

“If the chemical industry [in 2009] could recover to the level before the economic crisis, that would be very good,” said Wang.

“The road is tortuous, but the future is bright,” he said.

Judith Wang contributed to this story
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By: Pearl Bantillo
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