Asia petchem shares fall ahead of US, China tariff impositions

Source: ICIS News

2018/07/06

SINGAPORE (ICIS)--Shares of major petrochemical companies in Asia were mostly trading lower on Friday on investors’ concerns that an outright trade war between the US and China will soon begin.

The US from 00:01 Washington time (04:01 GMT) on Friday will impose tariffs on $34bn of Chinese good and Beijing has vowed to respond by an equal amount of tariffs of its own against US products.

Another round of US tariffs on additional $16bn worth of goods are expected to go into effect in two weeks, US President Donald Trump said late on Thursday.

At 03:00 GMT, South Korea’s Lotte Chemical was down by 1.98%, while LG Chem fell by 1.25% as the key Korea Stock Exchange KOSPI Index slipped by 0.30% to 2,250.85.

In Hong Kong, Chinese state-owned refining and chemicals giant Sinopec Shanghai Petrochemicals was 1.71% lower, while PetroChina fell by 0.70%.

In Taiwan, Formosa Petrochemical Corp (FPCC) was 1.26% lower, while Nan Ya Plastics was down by 0.80%.

In southeast Asia, PETRONAS Chemicals Group (PCG) slipped by 0.12% in Malaysia, while oleochemicals producer Olam International was down by 0.47% in Singapore.

In Japan, shares of chemical firms were bucking the trend, with Asahi Kasei up 1.38% and Mitsubishi Chemical up 2.28% as the Nikkei 225 benchmark was up by 0.67% at 21,691.89.

China’s Ministry of Commerce (MOC) had said on Thursday that the US will only be hurting itself as the world by imposing more tariffs.

"If the United States starts imposing additional tariffs, it will actually be charging taxes on firms both in China and around the world, as well as American companies," MOC spokesperson Gao Feng was quoted as saying by the state news agency Xinhua.

Feng said that around 59% of products worth $34bn subject to additional tariffs are made by foreign firms in China, with American firms making up a considerable part, Feng said.

"The US tariff move is in essence a hit to the global industry and value chain," Gao said. "To put it simply, the United States is firing at the whole world. It is also firing at itself."