Equity Analysis /
Saudi Arabia

Saudi Petrochemical Tracker – Prices impacted by significant decline in oil prices

    Iyad Khalid Ghulam
    Iyad Khalid Ghulam

    Vice President, Senior Equity Research Analyst

    SNB Capital
    10 June 2019
    Published by

    In May 2019, the TASI Materials Index declined 8.4% mom, in-line with the TASI which declined 8.5% mom. We believe the decline is due to lower oil and petrochemical prices. Prices of most petrochemical products declined by up to 8.3% mom. The PP-propane spread declined 2.8% mom to US$603, while the PP-naphtha spread increased 2.8% mom to US$567. The HDPE-propane spread declined 5.9% mom to US$534.

    Monthly highlights

    In May 2019, prices of most petrochemical products declined by up to 8.3% mom. HDPE, PP and Benzene declined by 8.3% mom, 5.2% mom and 3.2% mom, respectively while Ethyelene remained flat mom and Urea increased by 7.5% mom.

    In May 2019, the PP-propane spread declined by 2.8% mom to US$603, while the PP-naphtha spread increased 2.8% mom to US$567. The HDPE-propane spread declined 5.9% mom to US$534.

    Sipchem and Sahara announced the completion of its consolidation of equals, in an all-share transaction. As per the agreement, Sipchem has issued 0.8356 new shares for each Sahara share such that both Sipchem and Sahara own 50% of the combined group.