Asian petchems end mixed, oil lower as investors await US jobless claims data

Author: Nurluqman Suratman

2020/03/26

SINGAPORE (ICIS)--Asian petrochemical shares ended mixed on Thursday while crude oil prices fell as investors await key data on initial jobless claims in the US later in the day.

The widely-watched initial jobless claims data would give a clearer picture on the state of the world's largest economy following the coronavirus outbreak, which has now infected close to 500,00 people globally, with the number of deaths exceeding 20,000.

News that US Senate and White House leaders finally reaching an agreement on a $2 trillion stimulus package on Thursday failed to sway investors as fears of the global coronavirus pandemic continued to weigh on sentiment.

In Japan, the benchmark Nikkei 225 Index closed 4.51% lower with most petrochemical stocks in the red including Mitsubishi Chemical and Mitsui Chemicals.

Market sentiment was weighed by comments from Tokyo Governor Yuriko Koike on Wednesday on a possible "explosion" of the coronavirus after a record 41 new cases were recorded in the capital city.

In southeast Asia, the FTSE Bursa Malaysia KLCI Index closed up by 0.27% with PETRONAS Chemicals Group 4.21% higher.

Malaysia’s Prime Minister Muhyiddin Yassin on 25 March announced an extension to the existing movement control order (MCO) to 14 April this year.

Muhyiddin also said that the announcement for an economic stimulus package has been brought forward to 27 March instead of 30 March.

Singapore's Straits Times Index closed down by almost 1% after flash estimates showed that the the country's economy contracted by 2.2% in the first quarter of 2020.

Singapore on Thursday announced a new Singapore dollar (S$) 48bn in additional support measures to support businesses and individuals.

This follows the S$6.4bn in economic and healthcare measures announced last month.

% Change
Nikkei 225 (Japan) -3.80%
Asahi Kasei Corporation 1.57%
JXTG Holdings, Inc. -1.68%
Mitsubishi Chemical Holdings Corporation -3.77%
Mitsui Chemicals, Inc. -3.87%
Hang Seng Index (Hong Kong) -0.92%
Sinopec Shanghai Petrochemical Company Limited -0.54%
PetroChina Company Limited -1.90%
KOSPI Composite Index (South Korea) -0.30%
OCI Company Ltd 1.35%
SK Innovation Co., Ltd. 0.22%
LG Chem, Ltd. -2.11%
Lotte Chemical Corporation 3.66%
Hanwha Corporation 1.41%
TSEC weighted index (Taiwan) 0.15%
Formosa Petrochemical Corporation 0.76%
Nan Ya Plastics Corporation -0.90%
Formosa Chemicals & Fibre Corporation -0.58%
STI Index (Singapore) -0.96%
Wilmar International Limited -1.53%
Olam International Limited 0.68%
FTSE Bursa Malaysia KLCI (Malaysia) 0.27%
SSE Composite Index (Shanghai, China) 0.15%
Jakarta Composite Index (Indonesia) 7.31%
PT. Chandra Asri Petrochemical Tbk 1.26%

Overnight, US stock markets ended mostly positive after swinging wildly while waiting for US Senate to pass the stimulus measure.

European equities experienced larger gains of more than 2% on Wednesday.  However, the chemicals index Stoxx 600, with the largest chemicals producers listed, barely moved on Wednesday, trading near the close of the session up 0.06%.

Gains were pared at the end of the trading session on Wall Street following news that some disagreement on some parts of the bill is holding up the Senate vote.

Crude oil prices fell on Thursday as worries over dwindling demand arising from travel bans and country-wide lockdowns outweighed hopes that the stimulus in the US will boost economic activity.

$/bbl (09:20 GMT) Last price % change Net change Close Session high Session low
Brent 26.69 -2.56% -0.7 27.39 27.75 26.24
US WTI 23.73 -3.10% -0.76 24.49 24.65 23.41

All eyes now on US jobless claims
Initial jobless claims in the US  jumped by 70,000 to a two-year high of 281,000 for the week ended 14 March, reflecting the impact of the coronavirus outbreak on the US labour market as the lockdown of cities severely curbed economic activities, resulting in job losses, Malaysia's HongLeong Bank said in a note.

"Markets are projecting an even sharper spike today," Singapore-based Global Economics & Markets Research said.

The last spike in claims happened in the global financial crisis when claims stayed above 600,000 in H1 2009, according to UOB.

The peak was 665,000 in the week that ended 28 March 2009. Claims never exceeded 700,000 in any week during the global financial crisis, it added.

Focus article by Nurluqman Suratman

Visit the ICIS Coronavirus topic page for analysis of the impact on chemical markets and links to latest news.

(Photo by Xinhua/Shutterstock)