Two investment banks having two vastly different opinions on Petronas Chem, one called for a sell with a TP of RM6.54, the other called for a hold with a TP of RM8.18. Investors are confused. Now toss a coin, head follow RHB-OSK, tail follow HLG.
Mohd Yusri said the reopening of China and relaxation of its Covid Zero policy are positive for the chemicals sector, especially for polymers and olefins, which have seen a slight recovery in recent weeks.
"Nevertheless, we remain cautious, as prices of petrochemical products will continue to fluctuate.
“For example, prices of urea have unexpectedly declined sharply, despite the ongoing Russia-Ukraine war. We expect the first half of 2023 to be challenging, as we continue to face slow demand and higher costs due to inflation, particularly for our business in Europe and the US.”
i3lurker Sifu, you are very knowledgeable. Now I know Blue Urea. Thanks for the info.
Posted by i3lurker > 4 hours ago | Report Abuse
PChem plant ia already a useless white elephant! Technological change can be at speed of light, see 3G transition to 5G
Production of urea and ammonium nitrate fertilizers from sustainable feedstocks, namely water, nitrogen, and carbon dioxide. Critically, the process can be scaled-down such that equipment can be housed in a standardized ISO container deployed at the point-of-use, delocalizing production and eliminating costs, and emissions associated with transportation. The urea and ammonium nitrate were synthesized in a semi-continuous process under considerably milder conditions to produce aqueous fertilizers suitable for direct soil application, eliminating the financial and energetic costs associated with drying and prilling. The composition of the fertilizers from this process were found to be free from contaminants, making them ideal for application. In growth studies, the synthesized urea and ammonium nitrate were applied under controlled conditions and found to perform comparably to a commercial fertilizer (Nitram). Crucially, both the synthesized fertilizers enhanced biomass growth, nitrogen uptake and leaf chlorophylls (even in depleted soils), strongly suggesting they would be effective toward improving crop yields and agricultural output.
The Blue Urea concept is proposed for installation in ISO containers and deployment on farms, offering a turnkey solution for point-of-need production of nitrogen fertilizers.
If I remember correctly, did you not doubt Asiaply's purchase of a second factory last year, which is located just 500 meters from present/existing plant? So, their purchase price was not inflated as you deemed?
Not sure about their biogas methane, but their Electricity Power plant has yet to take off.
However, their co-operations with the TakWin group for copper conduit materials in EV left an impression of a sour taste.
Not only did they made the wrong choice in counters....they also participated in TakWin's fund raising mostly, and direct purchase from Open markets.....TakWin betul betul rugi one.
Their linkage with TakWin and even on BOD already scared me off. Many taken a look at TakWin and vomited.
Asiaply should have stayed their own course in Acrylics and the in-coming Electricity Power generator. Past 2 years of Sales badly affected by international MCO and high Oil prices drove their bottom line to the ground.
But Good luck to you if you choose to hold for 1-2 years.
We find Lctitan more interesting at current price levels. Have seriously taken a look and some interest at 1.35 (it's on record and Marked timeline at their forum at that price)
Asiaply needs to take a more serious stance and business perspective. SHOULD DISENGAGE ALL TIES WITH TakWin and move on. Then their price range from 9c to 11c is acceptable to take in and Hold for 1-2 years.
Myself is not a trained chemical engineer but basically. PChem and LCT are trading in a different market segment. PChem apart from Olefins manufacturing. A big chunk of PChem revenue comes from or generate from chemicals used in acrylic ink acids, dyes, gas solvents, personal care products, fertilisers manufactoring and methanol related chemicals eg resins and ammonia. Whereas LCT specialised only in Polyolefins and PP or polypropylene eg TBA, benzene and toluene used by plastic fabricators.
About 42 MTA of ethylene capacity is expected to be added from 2022 to 2026 (including potential new projects), with China contributing about 19 MTA of confirmed capacity (or 58 percent of the global total), followed by North America at about five MTA (or 15 percent of the global total).
The expected capacity additions will lead to an increasing mismatch between supply and demand, given that the forecast capacity growth exceeds demand growth of 3 percent per year. The imbalance could further affect utilization and ultimately product profit margins. Ethylene operating rates in the coming years are expected to fall when the new capacity comes onstream. A drop in utilization could lead to lower margins, based on the historical correlation between margin and global operating rate.
In the longer term, ethylene utilization rates and product margins are expected to improve in the second half of this decade. Industry conduct and investment behavior will govern the extent of improvement. However, the state of the industry now and in the short term is not as bright, emphasizing the value of performance excellence for the longer term.
FDI had been actively dumping Bursa since 2019 as evident of many counters are in slumps and prices unseen for past several years.
PChem is in a different world with their main products being "replacecable" at better costs and pricing.
Whereas LCT specialised Chemicals are never changed since their raw materials are always required for Plastics and Polyolefins. They supply building blocks. Moreover, they also have competitive edge in Virgin plastics manufacturing with lower cost of materials for better than others more profit margins.
Lurker, it's not the old Techs that you mentioned are involved but LCT's materials as raw input is here to stay unless some Aliens (came in balloons?) give us far advance technologies which replaces Plastics.
In 2021 Park Hyun Chul replaced Lee Dong Woo as CEO of LCT. The planned Indonesia line expansion project costing RM 18 billion { completion date year 2025 } the project need a long gestation period and any positive impact need to relied or hinges on the economic cycle conditions over the next few years. How much profit can be generated from this gigantic RM18 billion expansion? It's going to be a long term positive or definety short term uncertainty but earnings contribution in the short term will be mixed
Moreover, their USA counterpart made marginal losses of only circa RM6.4 millions.
This was due to a decline in margin spread amid weakened market demand resulting from a volatile external environment, higher foreign exchange (forex) losses of RM32.7 million, and its share of loss from Lotte Chemical USA Corporation (LC USA) of RM6.4 million.
Currently oversupply for LCT is caused by weak global demands due to economic slowdown and past 2 years of Covid lockdowns.
PChem's product demands are replaceable.
LCI investment is done with proper due diligent and of course, tech wise too. Who would pour Billions into old tech??? Or the challenges of transitional tech??
Even if there is an evolution, it could take decades. Just take a look the past century and the same raw input has never been changed.
I am aware and see your point of issues with demands for HDPE, LDPE, double L, PP and even PET. But you are only looking at the requirement and supply from within China. With the US and EU Trade war with China, it's not as easy as the Oil sanctions with Russia. For trans-shipments from China is not cost effective (have personally tried that before).
Nonetheless, other Asian countries, in which LCT have support would increase their demands during re-building.
SINGAPORE, Feb 22 (Reuters) - China's Sinopec Corp (600028.SS) said on Wednesday it has completed trial runs at a one million tonnes-per-year ethylene plant in the southern Chinese province of Hainan that will boost exports.
Reporting by Chen Aizhu; Editing by Tom Hogue and Elaine Hardcastle
Chinese's trade with the rest of the world especially Govt Agencies goes through many hands and red tapes. Even though their feedstock (from Russia with discounts?) are low, their final transfer price is no longer low.
LCT may find good value and demands base on reputation and US flagships.
China is expected to register the highest ethylene capacity additions in Asia contributing about 61% share of the region’s capacity additions by 2030, says GlobalData, a leading data and analytics company.
GlobalData’s report, ‘Ethylene Market Capacity and Capital Expenditure (CapEx) Forecast by Region, Top Countries and Companies, Feedstock, Key Planned and Announced Projects, 2021-2030’ reveals that China would have 30 new-build and expansion projects with capacity additions of about 38.53 million tonnes per annum (mtpa) by 2030.
Teja Pappoppula, Oil and Gas Analyst at GlobalData, says: “Majority of the capacity additions in China are from Shandong Yulong Petrochemical Longkou Ethylene Plant 2, with the capacity of 5.2 mtpa. It is expected to commence production of ethylene by 2030.”
Sinochem Quanzhou Petrochemical Quanzhou Ethylene Plant 2 is the second highest plant in terms of capacity additions with a capacity of 3.40 mtpa by 2026. It is operated by Sinochem Quanzhou Petrochemical Co Ltd.
Shandong Yulong Petrochemical Longkou Ethylene Plant 1 is the third highest contributor in terms of capacity additions in the country with the capacity of 3.0 mtpa. It is expected to commence ethylene production by 2025.
PRefChem's polymer lines shut after explosion at Malaysia's Pengerang ... Oct 28, 2022 — Its naphtha-fed steam cracker can produce 1,260,000 mt/year of ethylene, 250,000 mt/year of propylene and 185,000 mt/year of butadiene
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This book is the result of the author's many years of experience and observation throughout his 26 years in the stockbroking industry. It was written for general public to learn to invest based on facts and not on fantasies or hearsay....
8u29song
2,592 posts
Posted by 8u29song > 2023-02-24 11:00 | Report Abuse
EPF keep acquiring also cant help.....why...who is selling...