On Wednesday, the share price of The Siam Cement Public Company Limited (SET: SCC) at the time of 11:55 a.m. was at THB 194, a THB 11 or 6.01% increase with a total trading value of THB 1,182.32 million.
Yuanta Securities (Thailand) stated in its analysis that the Minister of Foreign Affairs reported recent developments in the Middle East, clarifying that Thailand is not a party to the conflict.
Iran was requested to facilitate the passage of Thai ships through the Strait of Hormuz, with the names of two ships submitted: one belonging to Bangchak Corporation Public Company Limited (SET: BCP) and the other to SCC. Recently, BCP’s vessel has already passed through the strait, while SCG Chemicals’ ship is still under observation regarding the situation.
This is positive news for BCP and SCC (the brokerage firm is more positive on SCC), as BCP’s proportion of Middle Eastern crude use is not high, about 15%, and its stock has not faced pressure from previous crude supply concerns, according to Yuanta.
Meanwhile, Yuanta viewed the development as more favorable for SCC due to its feedstock procurement via Hormuz, which accounts for approximately 49%. Earlier, SCC declared force majeure at the ROC plant, one of its three main petrochemical facilities. The market was concerned that if Hormuz remained closed by the end of March, further plant closures might be necessary by mid-April.
Since the outbreak of the conflict, SCC’s share price has declined 19% compared to competitors in the petrochemical sector such as PTTGC, IVL, and IRPC, which have gained on average +10%, as the petrochemical spread recovered, while SCC has been pressured by raw material supply risks, said the analyst firm.
This news thus helps ease SCC’s raw material pressure, allowing it to catch up with its peer stocks. Yuanta expected SCC to potentially rebound today, giving a “Trading” recommendation with a target price of THB 193.
