SCC Shares Surge as Better Product Spread Boosts Q2 Profits

On Wednesday at 12:01 PM (Bangkok time), the share price of The Siam Cement Public Company Limited (SET: SCC ) advanced by 1.20% or THB 3.00 to THB 253.00, with a trading value of THB 1.33 billion. Kasikorn Securities (KS) expects SCC to report a net profit of THB 7.8 billion for the second quarter of 2026, representing a 26% increase from the previous quarter. The primary driver behind this growth is a significant recovery in operating profit, despite a decline in inventory-related gains and the full-quarter shutdown of the Rayong Olefins Complex (ROC). Meanwhile, the Long Son Petrochemicals (LSP) project in Vietnam ceased operations for approximately half of the quarter. SCC is projected to record inventory gains of around THB 1.7 billion, a 35% decrease from the previous quarter, in line with lower inventory levels. Kasikorn anticipates SCC’s normalized profit for 2Q26 at approximately THB 6.2 billion, a 239% increase from the prior quarter. This improvement is attributed to a wider spread of petrochemical products, following market supply disruptions caused by unrest in the Middle East. Product spread for High Density Polyethylene increased by 62% quarter-on-quarter to $525 per ton, while the spread for Polypropylene rose by 53% to $437 per ton. Additionally, SCC benefited from extra dividend income from Toyota and Kubota, providing further support to its quarterly results. However, the timeline for ROC’s operation resumption remains uncertain, following a force majeure declaration in March 2026 due to geopolitical tensions in the Middle East. This situation has restricted the supply of key feedstocks such as naphtha and propane necessary for olefins production. Kasikorn views that the breakdown of the ceasefire agreement between the United States and Iran has heightened uncertainty over raw material supply security, making it difficult to specify a timeframe for ROC to restart operations. In parallel, SCC is currently conducting a feasibility study for a strategic joint venture with PTT Global Chemical Public Company Limited (SET: PTTGC ) focused on the olefins and polyolefins business in Thailand, which includes products such as Polyethylene and Polypropylene. The companies expect to reach a conclusion by the third quarter of 2026.