DOHA: Spot prices for petrochemicals during April gained month-on-month (MoM) driven by recovery in crude prices as Brent crude recovered to $48.1/bbl by April end from March’s month average of $39.8/bbl.
Brent crude prices for April averaged at $43.4/bbl, up 3.6 percent MoM but declining 29 percent YoY amid global supply glut and demand slowdown from China, Investment Bank SICO noted in its monthly ‘petrochemical round-up’ report.
In April month, Ethylene rose 1.5 percent month-on-month, Propylene gained 3.8 percent, HDPE added one percent, LDPE surged 4 percent, LLDPE soared 3.7 percent, Polypropylene jumped 7.7 percent, while Styrene slipped 3.5 percent.
Median of Petrochemical product prices for a basket of major products gained 3.0 percent MoM but declined 20 percent YoY in April. SASEPETR outperformed the broader index in April 2016
The Saudi Petrochemicals Sector Index (SASEPETR) gained 14.2 percent during April, outperforming the broader Tadawul benchmark, which gained 9.4 percent.
All stocks ended the month on a positive note with the exception of SAFCO which lost 0.6 percent. Among the large-cap names, Tasnee (31.4 percent), Saudi Kayan (39.3 percent), and PetroRabigh (20 percent) outperformed the Petrochemical index.
In the mid-caps space, Advanced Petrochemicals (16.4 percent) and Sahara petrochemicals outperformed the petrochemical index.
In Qatar, Industries Qatar closed 3.0 percent lower in April, underperforming the broader Qatar Exchange (QE) index by 1.2 percent.
1Q16 result season was a mixed bag with six names out of our coverage universe of 11, missing estimates. Advanced petrochemicals reported in line with estimates and three names (SABIC, Saudi Kayan and Tasnee) beat estimates.
The bulk of miss appears to have stemmed from lower than expected operating rates
The fire that broke out at a plant operated by SABIC subsidiary, Jubail United Petrochemical Co., is not expected to impact the plant’s operations. SABIC owns a 75 percent stake in Al-Jubail United.
Saudi Arabia’s Pension Fund holds a 15 percent position; while GOSI owns 10 percent of the plant.
Saudi Kayan resumes operations at ethylene glycol, ethylene oxide units Saudi Kayan resumed operations at its ethylene glycol and ethylene oxide plants after completing periodic maintenance.
Kayan’s other plants depending on ethylene glycol and ethylene oxide have also completed periodic maintenance and will resume operations gradually according to the plan, the company said in a statement to Tadawul.
The company started planned periodic maintenance at its plants on March 1, 2016.
Sipchem announced early redemption of its SAR 1.8bn 2011 sukuk.
The Peninsula
