KUALA LUMPUR, Dec 16 (Bernama) -- Bursa Malaysia extended its positive performance, closing higher for a fourth consecutive session, supported by improving local market sentiment underpinned by a firm domestic macroeconomic backdrop. At 5 pm, the FTSE Bursa Malaysia KLCI (FBM KLCI) rose 4.59 points, or 0.28 per cent, to 1,648.31, from Monday’s close of 1,643.72. The index had opened 0.95 of a point lower at 1,642.77, and moved between 1,636.50 and 1,648.71 throughout the trading session However, on the broader market, decliners beat gainers 699 versus 408. A further 520 counters were unchanged, 1,149 untraded and 12 suspended. Turnover rose to 2.59 billion units worth RM2.27 billion from 2.50 billion units worth RM2.16 billion on Monday.
Key Takeaway: U.S. tariffs are compounding structural challenges in the global petrochemical industry, with executives warning of up to a 15% further drop in global trade, following a 34% decline over the past five years.
Trade Under Pressure
Ganesh Gopalakrishnan, head of petrochemical trading at TotalEnergies, said:
If tariffs persist, global petrochemical trade could fall another 15%.
Trading houses without physical assets are struggling to stay afloat.
Overcapacity has already led to a 34% decline in trade volumes since 2020.
Rising Protectionism
Sanjiv Vasudeva, EVP & chief market officer at Haldia Petrochemicals, noted that:
Tariffs are pushing governments toward more protectionist policies.
Overcapacity and volatility make short-term investment planning difficult.
China’s Market Impact
Bahrin Asmawi, CCO of Petronas Chemicals Group (KL:PCHEM), warned that tariffs are diverting Chinese petrochemical exports into traditional markets previously dominated by Southeast Asian producers.
Bright Spot: India
Despite global headwinds, India stands out:
Consumption remains strong, with stable growth rates supporting demand.
India’s resilience offers a rare growth market for global petrochemical producers.
Outlook
With overcapacity, weak margins, and tariff-driven distortions, the petrochemical industry faces mounting structural and policy challenges. Executives say survival for non-integrated trading firms will depend on consolidation, adaptation, and securing new demand drivers in emerging markets like India.
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