26 July 2011 10:16 [Source: ICIS news]
By Nurluqman Suratman
SINGAPORE (ICIS)--Asian petrochemical producers can expect a weakening of exports if the US - the world’s biggest economy - were to default on its debts, analysts said on Tuesday.
However, the negative impact will likely be mitigated by the strength of demand coming from China and other emerging markets, they added.
US President Barack Obama warned that a failure on Congress’ part to increase the debt ceiling could cost jobs and potentially cause serious damage to the
“[Petrochemical] producers who are reliant on the US and Europe markets could face a serious impact on demand, but fortunately most of the Asian players are relying on the China market so the impact will be minor,” said Danny Ho, an analyst at Taiwan-based brokerage Yuanta Securities.
“The end-demand for finished goods should be affected, but emerging markets are growing faster than the American market so demand for Asian companies will not be so bad in the longer term,” Ho said.
Overall consumption from the western industrialised economies will likely remain weak with the
There are also concerns that the debt woes of both the
“If the European debt crisis gets worse, it will definitely have a big impact on Asian players, but in the near term the worries in the
For the time being, Asian demand looks strong enough to absorb the new olefin capacity that is due to come on stream, Chantaraserekul added.
Stock market indices in the region appeared to have shrugged off the
Among petrochemical majors listed in
However, Chinese state-owned refiners PetroChina and Sinopec were down by 0.88% and up by 1.69% in
Meanwhile, oil prices were stable in early Asian trade on Tuesday with the September West Texas Intermediate (WTI) contract up by $0.28/bbl at $99.48/bbl at 12:40 hours
“We believe that the oil flat price remains supported by strong investment demand and abundant dollar liquidity, while refining margins are likely to come under pressure from high refinery runs and soft demand,” the note added.
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Read John Richardson and Malini Hariharan’s blog – Asian Chemical Connections
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