Asia petrochemical shares mixed on virus fears; oil reverses early losses

SINGAPORE (ICIS)–Asian petrochemical shares ended the week mixed on Friday on concerns over the worsening coronavirus pandemic, while crude oil prices reversed early losses on hopes of a huge supply cut deal.

At 09:26 GMT, Japan’s Asahi Kasei closed higher by 1.12%, South Korea’s LG Chem slipped by 0.17%, while Thailand’s PTT Global Chemical rose by more than 5%.

Japan’s Nikkei 225 Index closed up 0.01%, Hong Kong’s Hang Seng Index ended 0.19% lower and South Korea’s KOSPI Composite closed 0.03% higher.

In Singapore, the Straits Times Index closed 2.62% lower as its government announced fresh measures to stem the country’ rising number of coronavirus infections.

Petrochemicals, energy and banking sectors will be excluded from the stricter measures and continue operations.

Malaysia’s main FTSE Bursa Malaysia KLCI Index ended 0.02% lower after the country’s central bank on Friday said that the economy could contract by as much as 2% or post a 0.5% growth.

Bank Negara Malaysia said that growth this year will be choked by output loss due to forced restriction to movement of people and disruptions to commodity supplies amid the coronavirus pandemic.

	% Change
Nikkei 225 (Japan)	0.01%
Asahi Kasei Corporation	1.12%
JXTG Holdings, Inc.	0.93%
Mitsubishi Chemical Holdings Corporation	-0.50%
Mitsui Chemicals, Inc.	-3.35%
Hang Seng Index (Hong Kong)	-0.19%
Sinopec Shanghai Petrochemical Company Limited	-3.05%
PetroChina Company Limited	-5.56%
KOSPI Composite Index (South Korea)	0.03%
OCI Company Ltd	-0.14%
SK Innovation Co., Ltd.	-0.77%
LG Chem, Ltd.	-0.17%
Lotte Chemical Corporation	-5.54%
Hanwha Corporation	0.32%
STI Index (Singapore)	-2.60%
Wilmar International Limited	-5.99%
Olam International Limited	-4.23%
FTSE Bursa Malaysia KLCI (Malaysia)	-0.02%
SSE Composite Index (Shanghai, China)	-0.60%
Jakarta Composite Index (Indonesia)	2.02%
PT. Chandra Asri Petrochemical Tbk	19.65%
SET Index (Thailand)	0.20%
PTT Global Chemical Public Company Limited	5.76%
Indorama Ventures Public Company Limited	0.45%
IRPC Public Company Limited	1.71%
The Siam Cement Public Company Limited	-0.63%

Most US-listed shares of chemical companies rose sharply overnight after oil prices rallied on news that Saudi Arabia and Russia could reach an agreement on reducing oil production.

US President Donald Trump jolted the oil markets with a tweet that he expected Saudi Arabia and Russia to cut output by as much as 15m barrels, sending crude prices spiking by as much as 35% in New York, an all-time record one-day move.

After the announcement, Saudi Arabia’s official press agency said the country was calling for an urgent meeting of OPEC+ states and another unspecified group of countries, with the aim of reaching a fair solution and to restore balance in the markets.

Concerns over the timeline of the potential deal as well as the worsening number of coronavirus infections globally drove down crude oil prices in early Asian trade on Friday, with Brent down almost 2% and US WTI by falling more than 3%.

Crude futures reversed losses in Asian afternoon trade, with benchmark Brent rising above $2/bbl on fresh cues that the meeting between OPEC and non-OPEC producers will soon materialise.

Crude futures have have plunged nearly 60% since the start of this this year as oil prices have collapsed both diminishing demand and mounting supply as refiners are running out of storage space.

Crude futures have have plunged nearly 60% since the start of this this year as oil prices have collapsed both diminishing demand and mounting supply as refiners are running out of storage space.

Global coronavirus cases

Source: World Health Organization (WHO)

Focus article by Nurluqman Suratman

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