Asian petchem shares mostly lower after US-China phase 1 trade deal

SINGAPORE (ICIS)–Asian petrochemical shares were mostly trading lower on Monday, along with crude oil prices, as uncertainty over finer details of a phase one trade deal between the US and China weighed on investor sentiment.

At 03:40 GMT, Japan’s Asahi Kasei Corp was down 0.87%, while Mitsubishi Chemical slipped by 1.00%, as the benchmark Nikkei 225 index dipped  0.02%.

In South Korea, Kumho Petrochemical was down 1.78%, while LG Chem inched up by 1.16%. The Korea Stock Exchange KOSPI index slipped by 0.02%.

In Hong Kong, Sinopec Shanghai Petrochemical was down 0.88% and PetroChina Co fell 0.26% as the Hang Seng index shed 0.33%.

In Malaysia, PETRONAS Chemicals Group was down 0.28%, while in Thailand, PTT Global Chemical slipped by 0.45%.

Brent crude was trading 22 cents lower at $65/bbl, while US crude was down 24 cents at $59.83/bbl.

China and the US late last week agreed on the text of their phase one trade agreement, which includes a stage-by-stage removal of the tariffs placed on Chinese goods, but the two economic giants have yet to sign an agreement.

US President Donald Trump said that China has agreed to “many structural changes and massive purchases” of US agricultural, energy and manufactured goods.

However, the 25% tariffs placed currently on Chinese goods will remain, “with 7.5% put on much of the remainder”, Trump said.

“The Penalty Tariffs set for December 15th will not be charged because of the fact that we made the deal. We will begin negotiations on the Phase Two Deal immediately, rather than waiting until after the 2020 Election,” he said.

China’s Finance Ministry on 15 December said that it will suspend the additional 10% and 5% tariffs on some US imports and continue to suspend additional tariffs on US-made autos and spare parts.

“China hopes to work with the United States on the basis of equality and mutual respect to properly address each other’s core concerns and promote the stable development of Chinese-US economic and trade relations,” China’s State Council’s customs tariff commission said on Sunday.

The US and China trade war has been ongoing for 17 months, weighing down on global economic prospects.

Photo: Container cargo ships at the Port of Oakland in the US. (By JOHN G MABANGLO/EPA-EFE/Shutterstock)

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