Shares of petrochemical companies in Asia were trading lower on Monday, in line with regional bourses, as disappointing jobs data in the US fanned concerns over a sharp slowdown in the global economy.
Among Japan’s petrochemical majors, Mitsubishi Chemical fell 1.32%, Mitsui Chemicals slipped 0.97% and Nippon Shokubai declined 1.32% as the benchmark Nikkei 225 index dipped 99.22 points or 1.10% at 8,921.86 at 12:39 Singapore time (05:39 GMT).
In South Korea, LG Chem was down 0.96%, Honam Petrochemical slumped 2.77% and Kumho Petrochemical fell 2.26%.
In Hong Kong, PetroChina was down 2.94% with the Hang Seng index falling 296.40 points or 1.50% at 19,504.24.
The China Shanghai Composite index was down 24.94 points or 1.12% at 2,198.64.
In Thailand, PTT Global Chemicals edged 1.31% lower, IRPC was down 1.08% and Siam Cement dipped 0.63%, as the benchmark SET index slipped by 10.86 points or 0.90% at 1,189.22.
Regional bourses were tracking the market sell-off in the US on 6 July, upon the release of a lower-than-expected increase in June of non-farm payrolls in the world’s biggest economy.
The disappointing jobs data is the latest in a string of downbeat news that had investors worrying over the world economic prospects.
China, the second biggest economy in the world and Asia’s largest importer of petrochemicals, continued to slow down based on its latest indicator on its manufacturing sector.
The country’s purchasing managers’ index (PMI) – a barometer of manufacturing activities – fell to 50.2% in June, barely above the 50% threshold that indicates expansion.
“The PMI fell further … signalling continued weaknesses in both external and domestic demand. In light of this, industrial production is projected to grow 10.0% year from 9.6% in May, substantially below 13.9% for 2011,” Singapore-based DBS Bank said.
“Poor industrial production growth is a prelude to slow export growth,” it said.
Demand for Asian goods is currently waning with the region’s major markets in the West still dealing with their own respective economic ills.
The eurozone is still grappling with its own debt crisis, while the US economy is still in a fragile state.
“The growth outlook [for China] remains murky. It is difficult to pinpoint any growth catalysts while threats on the external front have not yet disappeared,” said Singapore-based DBS Bank Research in a note.
It forecasts a deceleration in China’s economic growth in the second quarter to 7.9% from 8.1% in the first quarter.
On Monday, China reported a continued easing in inflation, which at 2.2% is at a 29-month low, providing Chinese authorities the leeway to further ease monetary policies without triggering inflationary pressures, according to analysts.
Japan, on the other hand, reported a 62.6% year on year decline in its May current account to yen (Y) 215.1bn ($2.7bn), with exports and imports registering almost the same growth of above 11%, official data showed.
The country’s exports totalled Y5,054bn in May, while imports stood at Y5,903bn, with the month’s trade deficit rising 10% to Y848.2bn, according to statistics from the Ministry of Finance.