Asian petchem shares mostly lower amid fresh rout in oil prices

SINGAPORE (ICIS)–Asian petrochemical shares were mostly lower on Tuesday while oil prices extended losses as worries over global oversupply continue to mount amid a shortage of storage capacity.

At 03:00 GMT, Asahi Kasei was 0.24% lower in Tokyo, SK Innovation was down 0.92% in Seoul and Formosa Petrochemical Corp fell by 0.49% in Taipei.

Japan’s Nikkei 225 Index was 0.62% lower, South Korea’s KOSPI Index slipped 0.10% and Singapore’s Straits Times Index fell by 0.34%.

The number of confirmed coronavirus cases has gone above 3m globally with total number of deaths rising above 210,000, according to the latest data from Johns Hopkins University.

Company/Stock Exchange	% Change
Nikkei 225 (Japan)	-0.62%
Asahi Kasei Corporation	-0.24%
JXTG Holdings, Inc.	-1.57%
Mitsubishi Chemical Holdings Corporation	0.17%
Mitsui Chemicals, Inc.	2.09%
Hang Seng Index (Hong Kong)	0.26%
Sinopec Shanghai Petrochemical Company Limited	0.00%
PetroChina Company Limited	-0.73%
KOSPI Composite Index (South Korea)	-0.10%
OCI Company Ltd	-2.01%
SK Innovation Co., Ltd.	-0.92%
LG Chem, Ltd.	2.55%
Lotte Chemical Corporation	-0.67%
Hanwha Corporation	1.06%
TSEC weighted index (Taiwan)	0.11%
Formosa Petrochemical Corporation	-0.49%
Nan Ya Plastics Corporation	0.67%
Formosa Chemicals & Fibre Corporation	0.28%
STI Index (Singapore)	-0.33%
Wilmar International Limited	1.19%
Olam International Limited	0.69%
FTSE Bursa Malaysia KLCI (Malaysia)	-0.06%
SSE Composite Index (Shanghai, China)	-0.37%
Jakarta Composite Index (Indonesia)	0.36%
PT. Chandra Asri Petrochemical Tbk	0.58%

As widely expected, the Bank of Japan (BOJ) on Monday expanded its monetary policy easing to ease the coronavirus’ impact on Japan and the global economy.

The central bank will conduct an increase in purchases of commercial paper (CP) and corporate bonds as well as make active purchases of Japanese government bonds(JGBs) and treasury discount bills.

The BOJ said that the outlook for economic activity and prices turned significantly weaker due to the severity of the coronavirus pandemic.

Japan’s economy is now expected to contract by 0.1 to 0.4% in the fiscal year ending March 2020 before worsening to a contraction of 0.3 to 0.5% in the following year, according to the BOJ.

“We believe the central bank will ease further down the road via deepening its negative policy call rate to -0.2% (from -0.1%), with potentially other measures to follow if the domestic economic situation turns even more dire which it most likely will,” Singapore’s UOB Global Economics & Markets Research said.

Overnight, US-listed and EU shares of chemical companies rose sharply.

Investor sentiment was supported by news that some of the European countries that are worst hit by coronavirus are planning to gradually reopen their economies while some states in the US are also planning to gradually reopen businesses.

$/bbl (At 03:29 GMT)	Last price	% change	Net change	Close	High	Low
Brent June	19.2	-3.95%	-0.79	19.99	19.97	18.9
US WTI June	11.11	-13.07%	-1.67	12.78	13.18	10.64

Crude prices extended the losses seen in the previous session as worries grew over the limited storage capacity available worldwide for oil.

Investors are also worried that the upcoming output cut by OPEC and its allies of 10m bbl/day from 1 May will not be enough to offset the plunge in demand cause by the virus pandemic.

Focus article by Nurluqman Suratman

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