Asia petrochemical shares, oil prices fall amid growing US-China tensions

Author: Nurluqman Suratman

2020/05/29

SINGAPORE (ICIS)--Asian petrochemical shares and oil prices fell on Friday as risk sentiment continued to be weighed by ongoing tensions between the US and China.

At 02:30 GMT, Asahi Kasei Corp was down more than 2% in Tokyo, Lotte Chemical Corp slipped 0.79% in Seoul and Formosa Petrochemical Corp fell by 0.11% in Taipei.

Japan's Nikkei 225 Index was down by 0.33%, Singapore's Straits Times Index was 0.11% lower and South Korea's KOSPI Composite fell by 0.30%.

"For today, we can expect Asian FX and equities to continue to trade alongside the ebb and flow of the US-China headlines," Singapore-based UOB Global Economics & Markets Research said on Friday.

Company/Stock Exchange % Change
Nikkei 225 (Tokyo) -0.33%
Asahi Kasei Corporation -2.15%
JXTG Holdings, Inc. -0.90%
Mitsubishi Chemical Holdings Corporation -2.21%
Mitsui Chemicals, Inc. -1.35%
Hang Seng Index (Hong Kong) -0.54%
Sinopec Shanghai Petrochemical Company Limited 1.05%
PetroChina Company Limited 0.00%
KOSPI Composite Index (Seoul) -0.30%
OCI Company Ltd -2.88%
SK Innovation Co., Ltd. 0.85%
LG Chem, Ltd. -0.77%
Lotte Chemical Corporation -0.79%
Hanwha Corporation 0.25%
TSEC weighted index (Taipei) -0.14%
Formosa Petrochemical Corporation -0.11%
Nan Ya Plastics Corporation 0.16%
Formosa Chemicals & Fibre Corporation -0.14%
STI Index (Singapore) -0.49%
Wilmar International Limited 1.02%
Olam International Limited -1.38%
FTSE Bursa Malaysia KLCI (Kuala Lumpur) -0.17%
SSE Composite Index (Shanghai) -0.03%
Jakarta Composite Index 0.23%
PT. Chandra Asri Petrochemical Tbk 0.34%

Overnight, US chemical stocks fell along with the general stock markets after US President Donald Trump said that he would hold a press conference on China later on Friday, raising fears on escalating US-China tensions.

China's National People’s Congress (NPC) on Thursday passed a new national security law for Hong Kong after months of pro-democracy protests that were started by plans for an extradition bill that would have allowed suspects to be sent to the mainland for trial.

"China’s decision to impose the new national security law on Hong Kong lies in direct conflict with its international obligations," the US, UK, Canada and Australia said in a joint statement on Thursday.

"The world’s focus on a global pandemic requires enhanced trust in  governments and international cooperation. Beijing’s unprecedented move risks having the opposite effect," they said.

$/bbl (As of 03:51 GMT) Last Price % Change Net Change Close High Low
July Brent 33.85 -0.0256 -0.89 34.74 34.42 33.8
July US WTI 31.62 -0.0363 -1.19 32.81 32.39 31.14

Crude oil prices fell on Friday after weekly US Energy Information Administration (EIA) data showed a surprise rise in crude inventories.

Investors will now focus on the outcome of upcoming talks between members of OPEC and its allies in the second week of June which could result in commitments of further production cuts.

OPEC+ members in April pledged to cut production cuts of 10m bbl/day in May-June this year.

Focus article by Nurluqman Suratman

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

(Image : Hong Kong skyline; Shutterstock)

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