Focus Stock: Foreign Investors Buy for 7 Consecutive Days, Formosa Plastics Chemical Rises 2 Days Straight to Limit Up, Share Price Hits Nearly 2-Year High

Recent U.S. military strikes against Iran have sharply escalated tensions in the Middle East, causing oil prices to rise significantly. Benefiting from the surge in oil prices, while the broader market fluctuated today (16th), the petrochemical sector maintained a strong upward momentum. Formosa Plastics Chemical (6505-TW) stood out the most, reaching the daily trading limit (up 10%) amid seven consecutive days of foreign investor buying. Its share price climbed above the 80 NT dollar threshold, marking a new high not seen in nearly 2.5 years, with trading volume increasing to 99,000 lots.

Heightened risks of supply disruptions in the Strait of Hormuz have driven both Brent crude oil futures and U.S. West Texas Intermediate (WTI) crude futures to around 80 dollars per barrel—reaching a one-month high. This has stimulated recent price increases across the three major petrochemical feedstocks: ethylene, butadiene, and propylene, fueling the recent rally in petrochemical-related stocks.

In the market, apart from Formosa Plastics Chemical rising to the limit-up for two consecutive days, companies such as Kuo Chiao (1312-TW) and CPC Corporation's Chemical Division (1314-TW) briefly rose nearly halfway to the limit-up. Formosa Plastics (1301-TW) and Taiwan Styrene Monomer (1310-TW) gained over 4%, while Hwa Hsia (1305-TW) and Taiwan Polychloride (1304-TW) also rose over 2%.

Institutional analysts noted that Formosa Plastics Chemical is benefiting from rising oil prices. Additionally, its refinery operating rate in the third quarter is expected to rebound sharply from earlier low expectations to 87%. Olefin production unit utilization is also projected to rise to 42% due to increased feedstock supply, with both production and sales volumes expected to grow.

Analysts added that given the relatively low base of petrochemical stock prices, foreign investors have been steadily accumulating positions recently. Investors should monitor whether oil prices can sustain their upward trend to potentially reignite gains in petrochemical stocks, while also remaining cautious about the risks of chasing high valuations.