Asia petchem shares fall as hopes over ’19 US-China trade deal fade

SINGAPORE (ICIS)–Shares of petrochemical companies in Asia and global crude futures fell in early trade on Thursday as the signing of a US-China trade deal may be delayed to next year.

At 03:00 hours GMT, Japanese producers Asahi Kasei and Mitsui Chemicals were down 2.51% and 1.82%, respectively, tracking the 1.72% decline in the benchmark Nikkei 225 index.

In South Korea, LG Chem was trading 1.45% lower, while SK Innovation was down by 0.65% as the key KOSPI index declined by 1.38%.

In Hong Kong, Sinopec Shanghai Petrochemical fell by 1.41%, and PetroChina declined by 1.08% as the Hang Seng Index shed 2.01%.

Thai producer PTT Global Chemical was trading 1.89% lower while Malaysia’s PETRONAS Chemicals Group (PCG) was down by 0.42%.

Overnight, US stocks fell on Wednesday on fading optimism over a trade deal this year.

The US and China have been locked in a 16-month long trade war, with high tariffs hitting billions of US dollars worth of goods between the two economic giants.

The Dow Jones industrial average index fell for a second day to close at 27,821.09, while the Nasdaq Composite sank by 0.51%. The S&P 500 index fell the most in a month, by 0.38%.

On Thursday, ICE Brent crude was trading 8 cents lower at $62.32/tonne and NYMEX Light Sweet crude was down 1 cent at $57.00/tonne.

The US is poised to impose tariffs on $156bn worth of Chinese goods in mid-December this year.

Risk sentiment also turned sour overnight after the US expedited legislation of the Hong Kong Human Rights and Democracy bill, which was seen as a show of support for Hong Kong protestors against China.

“This puts Trump between a rock and a hard place as signing off on the bill might impede the phase one trade deal with China he has been touting, while doing otherwise will be hugely unpopular back home,” Singapore’s OCBC Bank said in a note.

Photo: Nansha Port in Guangzhou, China (Source: Xinhua/Shutterstock)

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