Equity Analysis /
Saudi Arabia

Petrochemical Tracker: Higher prices supported by oil

    Iyad Khalid Ghulam
    Iyad Khalid Ghulam

    Vice President, Senior Equity Research Analyst

    SNB Capital
    6 May 2019
    Published by

    In April 2019, the TASI Materials Index increased 1.6% mom, underperforming the TASI which increased 5.5% mom. Prices of most petrochemical products increased 2%-11% mom. The PP-propane spread and PP-naphtha spreads increased 2.9% mom and 2.4% mom to US$620 and US$551, respectively. The HDPE-propane spread declined 1.0% mom to US$568.

    • In April 2019, prices of most petrochemical products increased 2%-11% mom. HDPE, PP and Benzene increased 2.8% mom, 5.5% mom and 10.6% mom, respectively while ethyelene declined 6.3% mom. Urea increased 11.8% mom.
    • In April 2019, the PP-propane spread and PP-naphtha spreads increased 2.9% mom and 2.4% mom to US$620 and US$551, respectively. The HDPE-propane spread declined 1.0% mom to US$568.
    • In Q1 19, net income of stocks under coverage increased 7.2% qoq (--39.9% yoy to SAR4.9bn). This is lower than our estimates of SAR5.9bn. Weak prices, lower spreads and margins were the main reasons behind the weak performance of the sector.