21 March 2012 06:16 [Source: ICIS news]
By Pearl Bantillo
SINGAPORE (ICIS)--Shares of petrochemical companies in Asia were lower on Wednesday, in line with regional bourses, on concerns over demand amid a slowdown in China, the region’s biggest importer of petrochemical products.
Among Japan’s petrochemical majors, JX Holdings fell by 2.05%, Mitsubishi Chemical was down by 0.66% and Mitsui Chemicals dipped by 0.76% as the benchmark Nikkei 225 index slipped by 46.68 points or 0.46% at 10,099.14 at 12:43 hours Singapore time (04:43 GMT).
In South Korea, SK Innovation slumped by 2.57%, LG Chem was down by 1.20%, Hanwha Chemical slipped by 0.93% and Honam Petrochemical was 2.48% lower as the KOSPI composite index declined by 14.58 points or 0.71% at 2,027.57.
PetroChina shares listed in Shanghai fell by 0.69%, while Sinopec declined by 1.45% as the Shanghai Composite Index dipped by 11.63 points or 0.49% at 2,365.21.
The Hang Seng index in Hong Kong was down by 38.65 points or 0.19% at 38.65.
China’s decision to hike fuel prices by yuan (CNY) 600/tonne ($95/tonne) from 20 March could cause demand to slow down significantly.
“The NDRC [National Development and Reform Commission] raised fuel oil prices twice in two months. Market players are worried that increasing energy cost will weigh on China’s economy further,” said Wei Tao, an analyst at brokerage Xingye Securities.
China’s demand for iron ores has also been softening, as indicated by major Australian miners BHP Billiton and Rio Tinto, and this is deemed as a strong indication that the country’s industrial growth is cooling down, according to Reuters.
In the middle of last week, Asia’s monoethylene glycol (MEG) market was shaken by China’s economic concerns, prompting traders with high inventory to offload heavy volumes into the market. This caused prices to fall below $1,000/tonne (€760/tonne) CFR (cost & freight) CMP (China Main Port).
China Premier Wen Jiabao had said that the country’s property prices are still far from reasonable levels, indicating that current policies curbing demand will not be relaxed so soon.
Early this month, China’s GDP growth target this year was cut to 7.5%, down from the 8% target that was kept for seven years.
Additional reporting by Dolly Wu
($1 = €0.76, $1 = CNY6.32)
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