The seesawing cost of crude oil is making an impact on the share price of resin maker Nuplex.
Crude oil represents about half of Nuplex's raw material costs.
Nuplex's shares closed down 15c yesterday at $7.30 after shedding a dividend, having dropped 5c on Friday. This coincides witha rise in oil prices amid concern Iran's capture of 15 British naval personnel will increase tensions in the Middle East.
The drop in Nuplex's share price followed a high last Thursday of $7.50. The share price had risen nearly 10 per cent from $6.85 at the beginning of the month during a period when crude oil prices were falling.
First NZ Capital analyst Jason Familton said the price of crude oil had fallen from about US$62 to US$57 a barrel during March, before the Iran incident.
"If you look at the crude chart and you put the inverse of that against Nuplex's share price it would be very consistent," he said.
The price of crude oil gained another 45c yesterday, rising to a three-month high of US$62.73.
Nuplex's shares had also been oversold when the price fell to US$6.90 Familton said.
"I think probably most analysts' valuations and target prices would be up probably closer to the [$7.50] level, if not more," he said.
Nuplex's steady climb during March came after half-year results showed revenue up nearly 20 per cent at $722.7 million and trading profit up more than 4 per cent at $49.1 million.
Nuplex's shares have risen from about $4.60 in January last year.
