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Petchem gained as gas prices fell in January
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Sunday, 10 Feb 2013

Arab News reported that oil prices continued its positive trend and added 5% during January 2013 while natural gas declined 2.6%. The WTI oil futures contracts for 2013 are trading at a slight premium while 2014 contracts are trading at 3.4% discount to the current levels. This is according to a new report issued yesterday by NCB Capital.

As per report, the gold futures for all periods continue to trade in line with the spot prices. Oil future curve shifted upward while the gas futures curve remained unchanged. The gold futures curve shifted downwards slightly. The gold future contracts continue to trade in line with the current spot price of near USD 1,668 per oz.

Petrochemical products prices increased by an average of 8.6% during January with an exception to benzene which declined 8.7%. All base metals increased 3% to 8% with the exception of steel which declined 1.2%. The TASI petrochemical sector increased 3% during the month in line with TASI all shares index which gained 3%. The sector constituents' performance was mixed; Tasnee lost 6.9% while Yansab increased 6.6% during January. Blue chip SABIC increased 2.5% while SAFCO remained unchanged.

Labor strike at SABIC's Netherland based SABIC Europe Petrochemicals' Geleen plant will impact production at the facility. The extent of production and financial loss is not known yet. This site has around 1,850 employees and a capacity to produce about 4 million tonnes of various petrochemical products.

SABIC's 50% owned subsidiary Al Jubail Petrochemical Company has a planned 3 week shutdown at its LLDPE plant during February to March 2013. SABIC increased February MEG Asia Contract Price by USD 80 per tonne MoM to USD 1,300 per tonne due to tight supply and higher demand.

Saudi Kayan will conduct a regular maintenance at its olefins unit and ethylene glycol and ethylene oxide plant. This is likely to impact the production of polycarbonate, phenol and amines. The financial loss of those shutdowns will be reflected in H1 2013 results.

Sipchem stopped the operations at International Diol Company for two weeks and International Methanol Company for 4 weeks for regular maintenance. IDC resumed operations on January 30th 2013. The shutdown at IDC is expected to have a financial impact of SAR 7.8 million in Q1 2013.

SIIG announced planned maintenance shutdowns at two of its projects: Saudi Chevron Phillips for 32 days starting January 31st 2013 and Jubail Chevron Phillips for 33 days starting February 18th 2013. JCP's styrene production unit has not been operating since January 18th 2013 due to a technical issue.

The shutdowns will impact SIIG's Q1 2013 results. On January 27th 2013, Alujain started a periodic maintenance at the propylene and polypropylene units of its subsidiary National Petrochemical Industrial Company for 22 days. This will result in a production loss of 24,000 tonnes equivalent to SAR 125 million which will be reflected in Q1 2013 results.

PetroRabigh successfully restored normal supply of electric power and steam within 20 days after the power outage on December 29th 2012. The shutdown is expected to have a limited financial impact in Q1 2013. Petrochem extended shutdown at its 65% owned project, Saudi Polymers Company has ended. The plants resumed operations on January 19th 2013 and will gradually reach the designed capacity.

Source - Arab News


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