Asia petrochemical shares mostly lower; crude extends gains on output cut hopes

Pearl Bantillo


SINGAPORE (ICIS)–Shares of most petrochemical firms in Asia were trading lower on Friday, weighed down by deteriorating demand amid the coronavirus pandemic, despite a continued rally in crude futures.

Company/Stock Exchange (as at 04:45 GMT) % Change
Nikkei 225 (Japan) -0.75%
Asahi Kasei Corporation -0.32%
JXTG Holdings, Inc. 2.18%
Mitsubishi Chemical Holdings Corporation 1.12%
Mitsui Chemicals, Inc. 0.56%
Hang Seng Index (Hong Kong) -0.28%
Sinopec Shanghai Petrochemical Company Limited -0.90%
PetroChina Company Limited 0.37%
KOSPI Composite Index (South Korea) -1.02%
OCI Company Ltd -3.44%
SK Innovation Co., Ltd. -1.11%
LG Chem, Ltd. -1.94%
Lotte Chemical Corporation 0.70%
Hanwha Corporation 2.44%
TSEC weighted index (Taiwan) 0.04%
Formosa Petrochemical Corporation -0.12%
Nan Ya Plastics Corporation -0.35%
Formosa Chemicals & Fibre Corporation -0.44%
STI Index (Singapore) -0.81%
Wilmar International Limited -0.89%
Olam International Limited 1.43%
FTSE Bursa Malaysia KLCI (Malaysia) -0.55%
SSE Composite Index (Shanghai, China) -0.63%
Jakarta Islamic Index (Indonesia) 0.31%
PT Chandra Asri Petrochemical Tbk 0.58%
PSE Index (Philippines) -2.40%
SET index (Thailand) 0.24%
PTT Global Chemical -1.31%
Siam Cement 0.31%

Source: Yahoo Finance

Most economies in the world remain in extended self-isolation to stem transmission of the deadly contagion, causing a severe demand crunch.

Within Asia, the Philippines announced on Friday that its lockdown will be prolonged by another two weeks until 15 May.

Singapore has also extended its “circuit breaker” measures up to 1 June in an effort to contain the spread of the flu-like virus.

Most economies in Asia are export-reliant, including China, from which the novel coronavirus outbreak started in late 2019.

“We expect the impact from a projected plunge in external demand will be more than 2% of GDP for South Korea, Taiwan, the Philippines, Malaysia, Thailand, Singapore and Hong Kong. For the latter two economies the external impact will be particularly large,” Oxford Economics said in a research note on Friday.

“We think APAC [Asia-Pacific] financial markets will remain vulnerable to further economic risks and changes in global sentiment,” it said.

US-listed shares of chemical companies rose for the second day on Thursday, backed by gains in oil futures, while the general stock market was mixed, giving up most of its gains from earlier in the session.

Crude futures were on their third consecutive session of gains on Friday, rising by more than $1/bbl at midday, with June Brent crude at $22.53/bbl, and US WTI for June delivery at $17.77/bbl.

Oil prices were rising amid news of production cuts by Kuwait and Algeria ahead of the official 1 May start date for the 9.7m bbl/day output cut by OPEC and its allies (OPEC+).

OPEC+ oil cuts were largely deemed insufficient to counter the demand destruction wrought by the coronavirus pandemic.

“There is little in the way of fundamental developments to support the move higher, although given the amount of weakness recently, we were due a relief rally,” the Economic and Financial Analysis Division of Dutch ING Bank stated in a research note.

“Renewed tensions between the US and Iran will likely be providing some support, but likely be short-lived unless we see a further escalation,” it said.

The US and Iran have issued warnings against each other over security threats in the Persian Gulf.

Spot prices of petrochemical feedstock naphtha and other selected downstream markets have hit multi-year lows during the week, dragged down  by an oil rout that witnessed the historic plunge below $0 of expiring May WTI (West Texas Intermediate) crude futures contract on 20 April.

Focus article by Pearl Bantillo

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


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