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Chemical stocks hit by Kaohsiung gas blasts

TAIPEI -- Chemical stocks in Taiwan took a dive Friday after a series of gas explosions rocked Kaohsiung Thursday night, killing 25 people and injuring 267, dealers said.

Many investors stayed away from chemical stocks amid worries that the findings of the investigation into the blasts would affect chemical stocks, dealers said.

"Uncertainty over the cause of the incident spooked many investors and they began dumping chemical stocks as soon as the local market opened," Hua Nan Securities analyst Henry Miao said.

As of yesterday., shares of LCY Chemical Corp. (李長榮化學) had dropped 7 percent, the maximum daily decline, to NT$23.25 (US$0.78), with 6.65 million shares changing hands.

China Petrochemical Development Co. (中石化), meanwhile, had lost 6.94 percent, falling to NT$11.4 on trading volume of 180.54 million shares. Both companies currently operate in Kaohsiung.

China Petrochemical said it had nothing to do with the explosion and that its operations in Kaohsiung remained normal. It said that in the interest of safety, however, it has gradually lowered the pressure in its propene pipelines.

LCY Chemical, meanwhile, said its pipelines in Kaohsiung were still functioning and it was not the one responsible for the explosion.

CPC Corp. (中國石油), a state-owned gasoline supplier that has production lines in Kaohsiung, also distanced itself from the disaster and said its operations in the southern city remained normal.

The incident is being investigated but Minister of Economic Affairs Chang Chia-juch (張家祝) said that a propene leak from an underground pipeline may have been the cause of the explosions.

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