Broker Says GRM Has Peaked, Recommends Selling TOP and IRPC

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Summary · why it matters

Bualuang Securities says the refining margin, or GRM, which surged on the war, has now passed its peak. The Singapore GRM hit a high of 21.29 US dollars per barrel in the second quarter of 2026, up 282% year on year and 214% quarter on quarter, before falling to 14.35 US dollars per barrel in the third quarter to date, after tightness in the oil products market began to ease. It expects a market deficit of about 1.5 million barrels per day in the second quarter of 2026 to narrow to 1.2 million barrels per day in the third quarter of 2026 and swing to a surplus of about 1.0 million barrels per day in the fourth quarter of 2026. Oil product demand in 2027 is expected to recover only slightly, with total demand rising from 103.2 million barrels per day in 2026 to 103.8 million barrels per day. The key pressure comes from supply, which in 2027 will grow faster than demand, with net refining capacity expected to rise by a total of 4.1 million barrels per day against demand growth of just 0.6 million barrels per day. As a result, the Singapore GRM is expected to average 8 US dollars per barrel in 2027, an upgrade from the previous estimate of 6 US dollars per barrel but still a clear decline from 14 US dollars per barrel in 2026, with the first half of 2027 possibly still elevated before weakening in the second half. Refiner share prices largely reflect a GRM well above the mid-cycle level of about 8 US dollars per barrel, so it recommends selling on rallies for TOP with a target price of 68 baht and IRPC with a target price of 2.80 baht. For BCP with a target price of 57 baht and SPRC with a target price of 14.60 baht, it maintains a hold rating, citing attractive dividends expected at around 8 to 10% in 2026 and 6 to 7% in 2027.

Impact on assets 4

Energy▼ · 2 stocks
IRPC Public Company Limited
IRPC
▼ NegativeCapitalrelevance

Bualuang recommends selling IRPC on rallies with a 2.80 baht target as GRM has peaked and is set to fall toward 8 USD/bbl in 2027.

Star Petroleum Refining Co Ltd
SPRC
± MixedCapitalrelevance

SPRC is rated hold with a 14.60 baht target on attractive dividends, but the article's main thrust is a peaking GRM and sell calls on other refiners.

Energy Transition & Power Demand▼ · 2 stocks
Thai Oil Public Company Limited
TOP
▼ NegativeCapitalrelevance

Bualuang recommends selling TOP on rallies with a 68 baht target as refining margins have peaked and are expected to decline sharply in 2027.

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