KUALA LUMPUR (Sept 1): CGS-CIMB Research has upgraded Lotte Chemical Titan Holding Bhd (LCT) to “add” at RM2.59, with an unchanged target price (TP) of RM2.92, and said that Hurricane Ida may push up polyethylene (PE) and mono ethylene glycol (MEG) prices.

In a note on Aug 30, the research house said LCT’s US facilities did not sustain any damage from the hurricane.

Commenting on developments in the US, the research house said Hurricane Ida may have a positive impact on petrochemical prices as the Category 4 storm slammed the southern coast of Louisiana on Aug 29.

It said about 95% of US oil and gas production in the US Gulf Coast was taken offline in preparation for the impact, including offshore production platforms, oil refineries and petrochemical plants.

CGS-CIMB said that at the moment, it did not yet have any information on the extent of any plant damages or the extent to which power was cut off from the plants, adding that more clarity may emerge in the next one to two days.

“We highlight that Hurricane Ida did not pass through Lake Charles, where LCT has a 20% effective interest in an ethane cracker and 40% effective interest in an MEG plant, so we do not forecast any physical damage.

“We suspect that electricity supply would not be disrupted either.

“Hence, LCT’s US facilities may be in a position to take advantage of higher US pricing for ethane and/or MEG in the weeks to come. Therefore, we upgrade LCT from 'hold' to 'add',” it said.

At 9.41am today, LCT had gained 1.56% or four sen to RM2.60, valuing it at RM6.01 billion.