SINGAPORE (ICIS)--Shares of major petrochemical firms in Asia were mostly lower on Wednesday amid fresh worries over the health of China’s economy as new data indicated continued weakness in the country’s manufacturing sector.
At 11:30 Singapore time (03:30 GMT), shares of energy giant PetroChina were down by 1.40% in Shanghai, while those of Sinopec Shanghai Petrochemical fell by 2.24% as the benchmark Shanghai Composite shed 1.39% to 3,141.49.
In Hong Kong, China’s national oil and gas firm CNOOC slumped by 4.03%, while PetroChina was down by 3.45%.
Caixin’s preliminary manufacturing purchasing managers’ index (PMI) for China fell to a 6.5-year low of 47.0 in September, down from the final reading of 47.3 in August, as output and new exports orders fell at a faster pace.
China is the world’s second-biggest economy and is a major importer of petrochemicals in Asia.
In South Korea, SK Innovation was trading lower by 0.81% while Lotte Chemical Corp slipped 2.77%. The key KOSPI Index declined 1.36% to 1,955.20.
Japan’s markets were shut on Wednesday.
In Taiwan, shares of Formosa Chemicals & Fibre were trading 2.31% lower after a fire broke out at its No 3 aromatics unit in Mailiao on 22 September, forcing the shutdown of the facility.
It was not immediately clear how long the plant will be shut following the incident.
Formosa Petrochemical Corp (FPCC) fell 2.45%, while Nan Ya Plastics Group was down 3.18% as the Taiwan Stock Exchange Weighted Index shed 1.83% at 8,212.79.
In southeast Asia, Malaysia’s PETRONAS Chemicals Group (PCG) was down by 0.98% while Thailand’s PTT Global Chemical (PTTGC) slipped 1.30%.
China’s economic slowdown can spill over to the region, which heavily relies on the world’s second largest economy to absorb exports.
On Tuesday, the Asian Development Bank (ADB) cuts its 2015 growth forecast for China to 6.8% from 7.2% previously.
“Despite robust consumption demand, economic activity fell short of expectations in the first eight months of the year as investment and exports underperformed," the ADB said.
China’s slowdown, however, will have a limited but “dramatically uneven” impact on global growth Euler Hermes Economic Research said in a recent note.
Global commodity exporters will particularly feel the heat from China’s slowdown, particularly Indonesia and Malaysia, Peru and Chile and South Africa, it said.
Other countries linked to China’s manufacturing value chain such as South Korea, Taiwan, Singapore, Hong Kong, and, to a lesser extent, Japan, are also at risk, according to the research firm.
“Most of these countries have strong buffers (monetary policy and sound public finances). They can withstand a cyclical shock (sharp deceleration in China) but in the longer term they will have to adapt to the Chinese new normal,” it said.
Read John Richardson and Malini Hariharan’s blog – Asian Chemical Connections