00:00Petronas Chemicals Group Berhad shares surged as much as 42% this week after the US and
00:06Israel launched strikes on Iran, which disrupted energy trade routes.
00:11Analysts say PetChem benefits because it sources gas feedstocks from within Malaysia, unlike
00:16many petrochemical producers that depend on supplies from the Middle East.
00:20The closure of the Strait of Hormuz, which normally carries 20-30% of the world's seaborne
00:25oil, liquefied natural gas, and liquefied petroleum gas trade, has severely disrupted deliveries
00:31and pushed Brent Crude up 17%, NAFTA up 26%, and spot LNG prices up more than 50%.
00:39CGS International upgraded PetChem to add from Reduce with a target price of RM4.45, noting
00:46its Kirteh, Olefins and Derivatives complex, and fertilizers and methanol division are not
00:51affected by feedstock disruptions.
00:53Higher feedstock prices are expected to hurt NAFTA-based petrochemical plants, potentially
00:58causing a 20-25% drop in production and demand over 6-12 months.
01:03As a result, CGS raised PetChem's financial year 2026 earnings forecast to RM143 million
01:10from a previous loss of RM667 million, highlighting its advantage as a low-cost producer with access
01:17to cheap gas feedstocks.
01:19Thank you for listening.
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