Petrochemicals prices will unlikely see further declines: Advanced chairman

Petrochemicals prices in Saudi Arabia hit a record low in Q4 2019, but are not expected to see further declines, Al Arabiya TV reported, citing Advanced Petrochemical Co. Chairman Khalifa Al Mulhim.

The US-Sino agreement is likely to improve demand in China, which will boost global demand for petrochemicals and lead to price increase, he added.

Advanced recorded strong profit margins in Q4 2019 - the highest in two years - exceeding $700 per ton. These margins represent the difference between prices of propane at $311 per ton and the polypropylene prices at $1,067 per ton in 2019.

“Propane prices usually rise in winter due to high demand, before they drop in the spring season,” Al Mulhim indicated.

Advanced has outsourced around 80,000 tons per annum, or 15% of its propylene requirements, at $850-900 per ton.

The company reported a net profit after zakat and tax of SAR 759 million for the fiscal year 2019, up by 5.86% year-on-year (YoY) due to a 6.2% increase in sales volume and a 26.5% decrease in prices of propane.