Asia petrochemical shares mixed; oil falls on US-China tensions

SINGAPORE (ICIS)–Asian petrochemical shares were mixed on Wednesday, while oil futures were lower amid concerns over rising tensions between the US and China.

At 03:08 GMT, Formosa Petrochemical Corp slipped 0.33% in Taipei, Mitsui Chemicals was up by more than 2% in Tokyo and LG Chem was down more than 3% in Seoul.

Japan’s Nikkei 225 Index was 0.02% lower, South Korea’s KOSPI Composite rose by 0.05% and Singapore’s Straits Times Index was down by 0.24%.

Company/Stock Exchange	% Change
Nikkei 225 (Tokyo)	-0.02%
Asahi Kasei Corporation	3.40%
JXTG Holdings, Inc.	2.62%
Mitsubishi Chemical Holdings Corporation	1.59%
Mitsui Chemicals, Inc.	2.72%
Hang Seng Index (Hong Kong)	-0.46%
Sinopec Shanghai Petrochemical Company Limited	1.55%
PetroChina Company Limited	-0.75%
KOSPI Composite Index (Seoul)	0.05%
OCI Company Ltd	1.58%
SK Innovation Co., Ltd.	2.07%
LG Chem, Ltd.	-3.26%
Lotte Chemical Corporation	1.87%
Hanwha Corporation	1.78%
TSEC weighted index (Taipei)	0.02%
Formosa Petrochemical Corporation	-0.33%
Nan Ya Plastics Corporation	-0.32%
Formosa Chemicals & Fibre Corporation	0.28%
STI Index (Singapore)	-0.20%
Wilmar International Limited	0.51%
Olam International Limited	0.34%
FTSE Bursa Malaysia KLCI (Kuala Lumpur)	1.16%
SSE Composite Index (Shanghai)	-0.21%
Jakarta Composite Index	-0.04%
PT. Chandra Asri Petrochemical Tbk	-0.35%

Singapore on Wednesday announced a fourth coronavirus support budget worth Singapore dollar (S$) 34bn, which will focus on additional industry and wage support as well as generation of new jobs for those displaced by the pandemic.

Together with the previous three budgets, the total financial support that the Singapore government has introduced is now about S$93bn, or about 19% of its GDP.

Equity markets in Asia are now turning their attention on the Japanese government’s announcement later on Wednesday of a second additional budget to help counter the impact of the coronavirus pandemic.

Overnight, US shares rose on signs of more economies re-opening but pulled back some of their gains in the last 30 minutes of trading following a report that said the US is planning to sanction Chinese officials and firms over Hong Kong, Singapore’s OCBC Bank said in a note.

“Markets are likely to remain volatile in the coming days as US President [Donald] Trump has said he would announce the response to China’s actions by the end of this week,” it said.

Hong Kong is bracing for a fresh wave of anti-government protests on Wednesday following China’s proposal to impose a new national security law on the former British colony.

Chinese government officials last week announced that it will review legislation that would criminalise anti-government protests.

White House press secretary Kayleigh McEnany said overnight that Trump is displeased with China over Hong Kong, and that Trump does not see how Hong Kong can remain as a financial hub if China takes over.

Rising tensions between China and the US weighed on oil markets as investors are worried of further weakening in energy demand if further trade sanctions are introduced.

$/bbl (As of 03:51 GMT)	Last Price	% Change	Net Change	Close	High	Low
July Brent	36.13	-0.0011	-0.04	36.17	36.16	35.75
July US WTI	34.26	-0.0026	-0.09	34.35	34.32	33.74

Losses were capped by signs that major oil producers are adhering to commitments made in April to cut production levels.

OPEC and other leading oil producers including Russia, a group known as OPEC+, agreed last month to slash their combined production by almost 10m bbl/day in May-June.

Focus article by Nurluqman Suratman

Photo: A view of cranes at the container port in Singapore, 06 March 2020. (By How Hwee Young/EPA-EFE/Shutterstock)

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