Hot Stock: Middle East Tensions Escalate, Oil Prices Surge – Foreign Investors Buy Formosa Chemicals for 9 Consecutive Days, Weekly Gain of 38.27%

Escalating U.S.-Iran tensions have sharply increased geopolitical risks, pushing international oil prices higher. Brent crude futures surged from $80 to a peak of $88 per barrel, reaching a one-month high, which in turn energized Formosa Chemicals & Fibre (6505-TW). Supported by nine consecutive days of foreign buying, the stock gained 38.27% for the week, closing at NT$81.30—the highest closing price in over two years—and posting five consecutive daily gains on its daily candlestick chart.

Last week, the Taiwan stock market fell over 1,400 points due to a sharp decline in South Korean equities. While electronics stocks were the main focus of selling, petrochemical stocks became a safe haven for capital amid rising oil prices. With the third quarter marking the peak season for petrochemical plants, analysts project strong pricing for upstream feedstocks like ethylene and propylene, which will support Formosa Chemicals’ operations.

Formosa Chemicals reported June revenue of NT$63.683 billion, up 10.2% month-on-month and 18.5% year-on-year. Its cumulative revenue for the first half of 2026 reached NT$344.972 billion, an 8.2% increase from the same period last year.

The company stated that refinery maintenance has been completed and crude oil deliveries have resumed, leading to simultaneous increases in refining volumes and product sales. Refinery utilization for Q3 is projected to rise to 87%. The naphtha cracker OL#3 underwent its annual inspection and, in alignment with downstream demand, is expected to achieve an average capacity utilization of 42% during the third quarter.

Analysts noted that Formosa Group’s petrochemical stocks remain at a low base, with earnings exceeding expectations. The combined first-half profits of the 'Four Treasures' of Formosa Group—including Formosa Plastics (1301-TW)—surpassed NT$100 billion, reversing last year’s losses. As refineries in Europe and the U.S. continue to shut down, global refining supply is expected to remain tight, providing further support for the group’s Q3 performance.