Breaking news from the Black Sea! A Turkish oil tanker was attacked, causing a massive explosion! Oil prices surge, and Asia-Pacific markets collectively adjust.

Asia-Pacific stock markets decline collectively, international oil prices rise.

On the 26th, A-shares plunged across the board in the afternoon, with the Shanghai Composite falling more than 1% and losing the 3,900-point mark again; the Sci-Tech Innovation Board Index dropped nearly 2%. Hong Kong stocks also fell sharply, with the Hang Seng Index dropping over 2% intraday and the Hang Seng Tech Index down over 3%.

Specifically, major A-share indices fluctuated and declined during the session, accelerating in the afternoon. By the close, the Shanghai Composite was down 1.09% at 3,889.08 points; the Shenzhen Component Index fell 1.41%; the ChiNext Index declined 1.34%; and the Sci-Tech Innovation Board Index dropped 1.83%. The combined turnover of Shanghai, Shenzhen, and Beijing markets was about 19.6 trillion yuan, roughly 2.36 trillion yuan less than the previous day. Nearly 4,500 A-shares declined.

In Hong Kong, the Hang Seng Index closed down 1.89% at 24,856.43 points, and the Hang Seng Tech Index fell 3.28% to 4,761.54 points. Among individual stocks, Kuaishou dropped nearly 14%, Pop Mart declined over 10%, China Life (601628), Huahong Semiconductor, and SMIC fell over 6%, Alibaba dropped over 4%, and Meituan declined nearly 4%.

Today, stocks in Japan and South Korea also declined collectively, with the Nikkei 225 index intraday falling over 1%. By the close, the Nikkei 225 was down 0.27%, and the Korea Composite Stock Price Index (KOSPI) fell 3.22%. Data shows that since the Iran conflict began, global investors have withdrawn about $52 billion from Asian emerging market stocks (excluding China), marking the largest monthly outflow on record. Oil-importing economies like India and South Korea led the sell-off, as soaring crude prices fueled inflation and growth concerns. Morgan Stanley analysts pointed out that Asia’s vulnerability to energy costs, combined with a strong dollar and profit-taking in tech stocks, has intensified market declines.

Meanwhile, international oil prices rose again today. ICE Brent crude briefly rebounded above $100 per barrel during the session, currently at $99.66 per barrel. WTI crude also recovered above $90 per barrel.

According to CCTV News, in the early hours of March 26 local time, a Turkish oil tanker named “ALTURA” was reportedly attacked by a drone in the Black Sea about 15 miles from the Istanbul Strait. The tanker was carrying 140,000 tons of crude oil from Russia to Turkey. The attack caused a violent explosion, damaging the bridge and upper structures of the ship, and flooding the engine room. After receiving an emergency distress signal, the Turkish Coast Guard dispatched patrol boats and emergency rescue vessels to the scene. The ship had 27 Turkish crew members onboard; no casualties have been reported so far.

Raw Material Drug Stocks Rise

Raw material drug stocks surged strongly during the session. By the close, Menovo (603538) hit the daily limit for three consecutive days; Staidla (603520) and Haisen Pharmaceutical also hit the limit; Hongyuan Pharmaceutical rose about 8%.

On the news front, on Wednesday, BASF, the global chemical giant, announced that due to increased costs from the US-Israel-Iran conflict, the company will raise prices on more products.

BASF stated it will increase prices for its basic amine product portfolio in Europe, with increases up to 30%, and some products may see even higher hikes. The price adjustments are effective immediately and may be implemented under existing contract terms.

Products involved include ethanolamine, ethyleneamine, isopropanolamine, methylamine, N,N-dimethylethanolamine, 3-(Dimethylamino)propylamine, dimethylformamide, propylamine, and ethylamine. These are common intermediate raw materials essential for electronics, agrochemicals, pharmaceuticals, and other industrial sectors.

Guojin Securities noted that ongoing rises in international oil prices and high overseas energy costs have led to widespread price increases across chemical products. Solvent products, which are difficult to stockpile, have seen continuous price hikes, making them one of the most elastic categories in this round of chemical price increases. This has directly driven up costs for downstream industries like pharmaceuticals and raw material drugs. Due to rising upstream raw material costs, there may be opportunities for raw material drug price increases. From the supply side, the industry experienced concentrated capacity expansion from 2020 to 2022, so supply pressure remains, and prices are expected to gradually transmit. From the demand side, downstream clients have been destocking since April 2023, with inventory levels remaining low. Raw material drug prices have been low for a long time, and once prices rise, sustained profitability is expected. Future attention can be paid to the profit elasticity brought by price increases.

Lithium Battery Concept Rises

Lithium battery concept stocks were active during the session. By the close, Haike Xinyuan surged over 16%, hitting the daily limit; Zhongrui Co. rose over 10%; Rongjie Co. (002192) hit the limit for three consecutive days; Shida Shenghua (603026) and Dashengda (603687) also hit the limit.

On the news front, Zimbabwe’s lithium export ban has lasted nearly a month with no indication of easing, likely exceeding previous market expectations. Market analysts predicted at the end of February that the impact of Zimbabwe’s export policy adjustments would last about a month.

Data shows Zimbabwe holds a significant position in global lithium resources. By 2025, Zimbabwe’s lithium resource output is expected to account for about 10% of the world’s total. Nearly all of Zimbabwe’s lithium ore and concentrates are exported to China. In 2025, China’s spodumene imports are projected at 6.209 million tons, with 1.191 million tons (19.2%) coming from Zimbabwe, equivalent to about 110,000 tons of lithium carbonate equivalent.

Institutions say Zimbabwe is one of China’s important sources of lithium ore imports. The current export ban aligns with its value retention strategy, but a sudden ban on all lithium ore exports and only allowing lithium sulfate exports does not match local production conditions. The ban is expected to be short-term; once resource depletion, smuggling issues, and companies with mining rights and processing plants complete new approval procedures, normal exports will resume. Under high demand and low inventory, supply disruptions will be amplified. Currently, lithium carbonate prices are near previous highs, facing some pressure. If the ban extends beyond expectations or other supply disruptions occur, prices could break through 200,000 yuan per ton.

Huaneng Liaoning Power Moves at Close

Huaneng Liaoning Power (600396) hit the daily limit again today, achieving nine consecutive limit-ups, but sharply fell back at the close, ending up 6.47%, with total daily turnover of 3.09 billion yuan.

The company reminded on the evening of the 24th that recent stock price fluctuations have deviated significantly from market trends and are far from the company’s fundamentals. From March 11 to March 24, the stock price increased by 95.36% over 10 trading days, a rapid rise that has seriously diverged from the Shanghai Composite Index and the industry index for power and heat production and supply.

After verification, the company’s operations are normal. Its main business is thermal power, with thermal power capacity accounting for 82.56%. There have been no major changes in daily operations. Market environment and industry policies remain stable, and costs and sales have not fluctuated significantly. Internal production and management are normal.

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