Saudi Petchem Index drops 1.1% in July as product prices retreat: Al Rajhi Capital

The rout in global oil prices and economic uncertainty— particularly in key markets like China— has caused petrochemical prices to drop in July and led the Saudi Petrochemical Index down 1.1 percent over the month, a report from Al Rajhi Capital said.

Such factors have also dampened investor sentiment in the Saudi stock market.

Naphtha prices fell 12 percent, while Ethylene and propylene prices fell over 11 percent each month-on-month. HDPE, LDPE, and polypropylene prices dipped 2.2 percent, 5.1 percent, and 8.6 percent respectively, the report added.

Prices of other petrochemical products also moved southward. Methanol fell 6.7 percent, while MEG and EDC prices declined 15.1 percent and 11.7 percent, respectively.

On the fertilizer front, feedstock ammonia prices retreated 3.8 percent while urea prices fell 9.5 percent Petrochemical stocks, in turn, were pressured by lower product prices.

Sipchem was the biggest loser, falling 11.4 percent month-on-month. Advanced Petrochemical Company was down 8 percent, Yansab fell 6.5 percent, and National Industrialization Co. (Tasnee) lost 5.6 percent, according to Al Rajhi.

SABIC, the kingdom’s largest player in the petrochemicals market, managed to gain two percent over July after it posted estimate-beating Q2 results.