Market and product

Shares of petrochemical firms in Asia fell sharply while oil prices shed more than $1/bbl on Monday due to heightened concerns about weakening global demand amid a pandemic.

Ongoing lockdowns may be extended, while more cities in the region are looking at adopting the measure to contain the spread of the deadly novel coronavirus.

At 03:10 GMT, Mitsubishi Chemical and Mitsui Chemicals were both down by close to 5% in Tokyo; while LG Chemical fell by more than 3% in Seoul; and Sinopec Shanghai Petrochemical Co was down 2.70% in Hong Kong.

Japan's benchmark Nikkei 225 index was down by more than 3%; the Hong Kong Hang Seng index was down by 1.48% and Singapore's Straits Times index fell by more than 4%.

OIL PRICES FALL BY MORE THAN $1/bbl

Crude oil prices extended losses from the previous session after the US Department of Energy suspended plans to purchase crude for the Strategic Petroleum Reserve after its requested $3bn failed to make its way into the recently-announced US stimulus package.

Naphtha crack spread turned negative last week, while gasoline’s crack spread has been negative since mid-March.

Asian equities came under renewed pressure following a weak equity performance in the US and continued weakness in crude oil prices.

US-listed chemical stocks fell on Friday despite the US Congress passing a $2tr stimulus bill intended to offset some of the economic damage caused by the coronavirus pandemic.

Financial markets continued to be rocked by rapidly increasing number of confirmed coronavirus cases in developed economies, with the count in the US surpassing 125,000.

US President Donald Trump on 29 March extended the national social distancing guidelines to 30 April after suggesting that the coronavirus death rate would likely peak in two weeks.

In Europe, the number of infected continued to rise over the weekend, with Spain recording its worst day on 29 March, with the number of coronavirus-related deaths surging by 838 to 6,528; while Italy reported 756 fatalities on the same day, bringing the total to 10,779.

Global coronavirus cases are now at more than 700,000 and could cross a million soon, according to analysts.

In Asia, Vietnam's prime minister on Monday warned its major cities to prepare for possible lockdowns to halt the spread of the coronavirus as the number of confirmed cases in the country almost reached 200.

Indonesia is reportedly preparing to lock down the capital city region; while Malaysia announced a Malaysian ringgit (M$) 250bn stimulus package to help counter the economic impact stemming from the coronavirus.

For this week in Asia, all eyes will be on the release of China’s March official manufacturing and non-manufacturing purchasing managers' index (PMI) data due on 31 March.

"Given that China’s factories have started to resume work, market consensus expects March PMI figures from China to improve from February’s lows, but still stay in contraction territory," Singapore-based financial institution UOB said.

China's politburo - its top policymaking body - in a meeting on 27 March said that it is ready to push out a slew of measures to counter shocks from the coronavirus pandemic.

"Although China has not announced detailed fiscal stimulus, lagging behind its peers which have rolled out massive fiscal stimulus in the past week, the latest politburo meeting set the tone that China is ready to do more on both monetary and fiscal front," Singapore's OCBC Bank said in a note. - ICIS-