TAIPEI (TVBS News) — Shares of Formosa Plastics (台塑), Nan Ya Plastics (南亞), and Formosa Chemicals & Fibre (台化) surged on Tuesday (Jan. 14), reversing a recent weak performance. Early trading saw these stocks rise by over half a limit, with Formosa Petrochemical (台塑化) also opening higher, driven by international oil price increases.
Analysts noted that Nan Ya Plastics briefly reclaimed the NT$30 mark, attributing the gains to rising international oil prices, which benefit Formosa Petrochemical's in-transit and inventory raw materials. The U.S. expanded oil sanctions against Russia last Friday, pushing Brent crude futures to $81.01 per barrel on Monday, marking a four-and-a-half-month high since late August.
While the oil price surge benefits Formosa Petrochemical and its affiliated companies, the domestic petrochemical sector faces challenges due to China's overcapacity in petrochemical production. Formosa Plastics reported on Jan. 10, 2024, that China's competitive advantage stems from low-cost energy resources, leading to unprecedented industry downturns.
Looking ahead to 2025, Formosa Plastics expressed optimism that China's efforts to stimulate the housing market, eliminate inefficient production, and boost domestic demand could alleviate overproduction and price competition pressures. Formosa Plastics also believes that resolving the Russia-Ukraine war could spur reconstruction demand, potentially lifting the petrochemical industry from its current slump.