Shares of major Japanese firms lower after major quake, tsunami

14 March 2011 02:37  [Source: ICIS news]

SINGAPORE (ICIS)--Shares of major Japan petrochemical companies fell in early trade on Monday after the deadly earthquake and massive tsunami that ravaged the northeastern region of the country on 11 March.

As of 09:27 local time (01:27 GMT), Japan’s benchmark stock market index – the Nikkei 225 – was down 4.34% at 9,809.69, with producer Mitsui Chemicals 10.43% lower.

Among petrochemical firms listed in Tokyo, Shin-Etsu Chemical was down 6.19%, Sumitomo Chemical was 3.36% lower and Mitsubishi Chemical was down 8.22% in early trade.

Mitsui Chemicals and Mitsubishi Chemical operate chemical plants at Kashima in Ibaraki prefecture and Ichihara in Chiba prefecture – areas that were devastated by Friday’s events. All of Mitsubishi Chemical’s petrochemical sites in Kashima were closed down in the aftermath of the quake.

The earthquake and tsunami have resulted in 20%, or 900-950 bbl/day, of refining capacity loss in Japan, according to UBS analysts in a research note.

While some refineries are shut for safety concerns, Cosmo Oil has shut its 220,000 bbl/day refinery in Chiba because of a fire at the facility, they said. Cosmo Oil’s shares slumped 25.88% in early trade on Monday.

Shares of Japanese oil and refining major JX Holdings, meanwhile, dipped 11.54% after news that three of its refineries – a 145,000 bbl/day unit at Sendai in Miyagi prefecture, a 189,000 bbl/day crude oil refinery at Kashima in Ibaraki prefecture and a 270,000 bbl/day unit at Negishi, Kanagawa prefecture –  were down.

JX Nippon Oil & Energy, the petrochemicals arm of JX Holdings, also shut its paraxylene facilities in Kashima, with a combined capacity of 600,000 tonnes/year, and in Kawasaki, with a combined capacity of 350,000 tonnes/year.

An estimated 2m tonnes/year of ethylene capacity was affected by the earthquake on Friday, equal to 27% of total ethylene capacity in Japan, according to the UBS note.

This translates to 4% and 1.4% of Asia and world ethylene capacity, respectively, the note said.

It has also been reported that the total aromatics capacity being affected is estimated at around 5.7m tonnes/year, or 30% of Japan’s production, the UBS analysts said.

The 8.9-magnitude quake struck Japan’s northeast coast at 14:46 local time, some 373 km (231 miles) northeast of Tokyo, and 130km east of Sendai, Honshu – the largest island in the country, according to the US Geological Survey (USGS). Japan’s Meteorological Agency has upgraded the magnitude of the earthquake to 9.0.

The earthquake caused a huge tsunami with waves of up to 10 metres high, which swept inland, destroying buildings and infrastructure and paralysing refining and petrochemical operations.

Japanese officials have said that the death toll could exceed 10,000, with more than 350,000 people already evacuated.

As many as 20,820 buildings were either destroyed or badly damaged, according to Kyodo News. 

About 1.8m households were without power and 1.4m homes were without electricity, Japan's Ministry of Health, Labour and Welfare said.

By: Nurluqman Suratman

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