Petrochem/Sunvic/Meghmani

Petrochem/Sunvic/Meghmani: Barclays warns that the current low US natural gas prices, depressed by the explosion of shale gas production, may pose a significant long-term threat to high-cost Asian petrochem producers due to cost arbitrage between US and Asia and new chemical investments in the US. This means that high-cost chemical producers in Asia may have to compete on product differentiation rather than cost or consider rationalizing their capacity. Among the listed chemical producers on SGX, Sunvic has been hit by deteriorating profit margins due to lower ASPs for its acrylic acid while Meghmani has seen weaker sales from its pigment and agrochemical products.