Thai petchems await China rebound

Diversified PTTGC is strong enough to wait for Chinese product demand but others may suffer

Better than expected Chinese industrial production in March raised hopes for a sharp recovery for downstream petrochemicals companies in the Asia Pacific region. But a Chinese recovery is far from assured and, if the Chinese economic recovery is sluggish, only the financially strongest product suppliers are likely to benefit. The Thai government made a strategic decision to develop its domestic petchem industries in response to the 1970s oil shocks. The result today is that larger players such as PTT Global Chemical (PTTGC), a subsidiary of Thai NOC PTT, and SCH Chemicals, a unit of Siam Cement, have diversification and a strong parent on their side. SCH has stated that its plan to invest in