Asia petchem shares mixed; oil falls amid worries over second wave of infections

Nurluqman Suratman

13-May-2020

SINGAPORE (ICIS)–Asian petrochemical shares were mixed while oil prices fell on Wednesday as worries about a new wave of coronavirus infections amid re-opening of economies continued to weigh on investor sentiment.

At 04:18 GMT, Mitsui Chemicals was 0.05% lower in Tokyo, Formosa Petrochemical Corp was 0.58% higher in Taipei and Sinopec Shanghai Petrochemical Co shed 0.49% in Hong Kong.

Japan’s Nikkei 225 Index was 0.46% lower, South Korea’s KOSPI Composite Index was up by 0.07% and Singapore’s Straits Times Index was down by 0.40%.

Company/Exchange % Change
Nikkei 225 -0.46%
Asahi Kasei Corporation 0.20%
JXTG Holdings, Inc. 1.17%
Mitsubishi Chemical Holdings Corporation 0.54%
Mitsui Chemicals, Inc. -0.05%
HANG SENG INDEX 0.01%
Sinopec Shanghai Petrochemical Company Limited -0.49%
PetroChina Company Limited -1.12%
KOSPI Composite Index 0.07%
OCI Company Ltd -1.82%
SK Innovation Co., Ltd. -1.05%
LG Chem, Ltd. 2.07%
Lotte Chemical Corporation 0.27%
Hanwha Corporation 0.80%
TSEC weighted index 0.17%
Formosa Petrochemical Corporation 0.58%
Nan Ya Plastics Corporation 0.31%
Formosa Chemicals & Fibre Corporation -0.14%
STI Index -0.40%
Wilmar International Limited 3.93%
Olam International Limited 0.65%
FTSE Bursa Malaysia KLCI 1.32%
SSE Composite Index -0.18%
Jakarta Composite Index -0.96%
PT. Chandra Asri Petrochemical Tbk -3.09%

Indonesian President Joko Widodo on Tuesday warned that lifting of partial lockdowns should be undertaken cautiously.

Any easing of lockdowns – affecting about 100m people in a country with more 250m population – “must be based on data”, he said at a cabinet meeting on Tuesday.

Equity markets are also awaiting Malaysia’s first-quarter GDP numbers due later on Wednesday for further cues on Asia’s economic health.

“While market is expecting a relatively subdued contraction of 1%, we are concerned that [Malaysia’s] growth might be more lacklustre than that, with the risk of -4% year on year potentially,” Singapore’s OCBC Bank said.

The Philippine economy is projected to contract by 2.0-3.4% in the current year because of the pandemic, based on government estimates.

Investors are now eyeing a speech by US Federal Reserve chairman Jerome Powell later at 13:00 GMT where he is expected to discuss current economic issues as well as his views on the future of US’ monetary policy.

Overnight, US markets tumbled on Tuesday, weighed down by warnings from the director of the its Centres for Disease Control and Prevention that a premature reopening of the economy may trigger an outbreak that might not be controllable.

There are now a total of 1.34m coronavirus cases in the US, with 18,106 new cases according to the latest data from the US Centers for Disease Control and Prevention (CDC).

The global tally of coronavirus infection stood at 4.3m, according to the World Health Organization (WHO).

Oil prices tracked the weakness in equity markets on Wednesday amid concerns that energy demand could be weakened further if a second wave of new infections result in further lockdowns.

$/bbl (At 03:25 GMT) Last price % change Net change Close High Low
Brent July 29.52 -1.53% -0.46 29.98 29.64 29.29
US WTI June 25.55 -0.89% -0.23 25.78 25.71 25.07

Gains overnight were driven by an unexpected commitment from Saudi Arabia to deepen production cuts in June to help drain the glut in the global market that has grown as the coronavirus pandemic crushed fuel demand.

Focus article by Nurluqman Suratman

Photo: Police officers in Indonesia wearing face masks enforce lockdown restrictions on the street. (Photo by Algi Febri Sugita/SOPA Images/Shutterstock)

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

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