Page 17 - DMEA Week 19 2020

DMEA PETROCHEMICALS DMEA
Saudi Advanced Petrochemical sees 36% slump in Q1 profits
SAUDI ARABIA
Demand for polypropylene has seen a sharp fall in recent months.
NET profits at Saudi petrochemicals producer Advanced Petrochemical slumped in the first quarter, on the back of weaker sales.
Demand for polypropylene, used to man- ufacture a range of consumer and industrial products, has seen a sharp fall in recent months owing to the coronavirus (COVID-19) pan- demic. Advanced saw its polypropylene sales volumes drop 8% year on year in the first quarter, while prices fell 10.3%, it said in a Saudi bourse statement.
Net income came to SAR104.3mn ($27.8mn), down 35.6% y/y and down 45.7% quarter on quarter. Its overall revenues tumbled 17.5%, landing at SAR535mn.
The pandemic has disrupted the plastics manufacturing chain, leading some companies to halt production, which in turn has lowered demand for polypropylene and other feed- stocks. Longer term, demand is expected to fall this year owing to the broader economic impli- cations of the crisis, although some producers
have been in a position to benefit from a spike in demand for face masks and other personal protective gear.
Advanced produces around 455,000 tonnes per year of propylene and 450,000 tpy of poly- propylene at its production facilities in the indus- trial city of Jubail on Saudi Arabia’s east coast. The company recently signed a deal with South Korea’s SK Gas to build and operate new plants for polypropylene and propane dehydrogenation – a project worth $1.8bn.
While Advanced remained in the black in the first quarter, Saudi Arabia’s top petrochemicals firm SABIC was not so fortunate. The state- owned company suffered its second quarterly loss in a row in the three months ending March 31, reaching SAR950mn.
SABIC’s revenues were down 18% y/y, and it suffered SAR1.07bn in impairments, mainly relating to its decision to halt the production of plastic material ULTEM at its plant in Cartagena, Spain. ™
FUELS
Iran stuck with “unprecedented” gasoline stockpile
IRAN
Consumption has fallen from 97mn litres daily last year to 65mn litres.
IRANIAN oil minister Bijan Namdar Zanganeh has said that Iran’s stockpiling of gasoline has reached an “unprecedented historic level” due to falling demand caused by the coronavirus (COVID-19) pandemic, Radio Farda reported on May 12.
Last year, the average daily consumption of gasoline in Iran was 97mn litres, or around 25.5mn gallons, but consumption has fallen to 65mn litres a day in the past two months given the constraints on consumers caused by the health emergency, the news outlet said.
Except for a limited amount of gasoline unof- ficially exported to neighbouring countries, Iran cannot pursue large-scale exports of gasoline because of US sanctions. The hard currency earned on those limited exports will be greatly reduced given falling prices caused by the inter- national oil price slump.
Zanganeh also reportedly referred to less
oil production in Iran causing petrochemical plants to suffer a 40% reduction in oil byproducts required for production purposes.
IRNA news agency on May 13 quoted Zan- ganeh as saying that Iran’s oil ministry has made strenuous efforts to ensure oil industry produc- tion did not come to a halt amid the pandemic, while also protecting its workers. ™
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