SABIC CEO says global economy slowdown and trade war have affected prices

Saudi Basic Industries Corp (SABIC) Vice Chairman and CEO, Yousef Al-Benyan, attributed the decrease of petrochemicals prices to the global economic slowdown and US-China trade war.

He said during the company’s Q2 results announcement, that this has also affected customers’ confidence in the market and led to a drop of key petrochemical products price, adding that these factors were reflected on the company’s results.

Ethylene glycol prices declined 41 percent Year-on-Year (YoY), while polycarbonate declined 30 percent during the same period; meanwhile, feedstock prices rose as a result of the increase of crude oil price.

Despite these challenges, SABIC’s CEO stated that the company has focused on key criteria including the credibility of its plants, and ensuring customers’ satisfaction. This strategy helped the company maintaining sales and slashing costs.

Regarding the purchase of the Public Investment Fund’s stake by Aramco, Al-Benyan said that the deal is under regulatory processes, expecting to be closed by year-end or first quarter 2020.

Elsewhere, SABIC’s CEO said that the Clariant deal is a strategic investment on the long term and a key component of the company’s strategy within the petrochemical sector, noting that talks will resume once the market conditions improve.

He also said that global production capacity of petrochemical has grown in 2019.

The company has earlier posted SAR 5.5 billion profit in the first half 2019, a 55 percent decline compared to the same period 2018, while second quarter profit declined 68 percent to SAR2.12 billion.