The Taiwan Institute of Economic Research (TIER, 台灣經濟研究院) yesterday offered a positive outlook on the nation’s chemical industry in the second half, led by a recovery in demand for industrial chemicals.
“A growing need for chemicals used in flat panels and electric vehicles is expected to stimulate sales further” in the coming months, TIER analyst Lo Kai-chen (羅凱禎) told an investors’ conference at the Taiwan Stock Exchange in Taipei.
Chemicals used in semiconductor manufacturing, which have a high entry barrier, should also serve as a sales catalyst for some local chemical firms, Lo said.
In contrast, domestic demand for coating chemicals is likely to be dragged down by a slower real-estate market, she said.
Despite a positive sales forecast for industrial chemicals, TIER said that rising oil prices might weigh on local chemicals’ earnings performance over the next few months as costs rise.
Global crude oil prices are likely to hit US$55 per barrel in the second half, compared with US$48 per barrel in the same period last year, TIER said.
The aggregate first-half revenue of 20 benchmark chemical makers listed on the Taiwan Stock Exchange totaled NT$75.06 billion (US$2.49 billion), up 3.37 percent from a year earlier, TIER data showed.
The improvement in revenue was primarily due to a strengthening global economic recovery, the think tank said.
However, gross profit during the same period declined 11.04 percent annually to NT$13.8 billion, which TIER attributed to rising raw material prices and the sharp appreciation of the New Taiwan dollar.
Prices of titanium dioxide — an important catalyst used in air and water purification systems — reached US$3,700 per tonne last quarter, compared with US$3,484 per tonne in the same period last year, TIER data showed.
In related news, solvent maker Shiny Chemical Industrial Co Ltd (勝一化工) reported that first-half net profit reached NT$415 million, rising 12 percent from a year ago.
Cumulative revenue rose 12 percent annually to NT$3.3 billion, on shipments of 92,061 tonnes, the firm said.
Company spokesman Li Huan-yi (李歡益) attributed the robust performance to increasing revenue contribution from specific solvents used in the semiconductor manufacturing processes.
The solvent maker’s major customers include Taiwan Semiconductor Manufacturing Co (TSMC, 台積電), the world’s largest IC foundry service provider.
A better product portfolio also helped lift the company’s profitability, with gross margin rising from 26.8 percent last year to 27.2 percent in the first half, Shiny said.
The company, which operates three plants in Kaohsiung and one in Changhua, said it expects its utilization rate to reach more than 90 percent this year on robust client demand.
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