Tasnee CEO says petrochemicals sector to recover at slow pace

The petrochemicals industry is forecast to recover at a slower pace, with a slight rally in product prices in Q4 2020, Mutlaq Al-Morished, Chief Executive Officer (CEO) at National Industrialization Co. (Tasnee) told Argaam.

“I believe the industry will recover in 2021 – 2022 amid the current circumstances, however, the recovery pace can be faster in case a vaccine is produced,” he stated.

Product prices – especially for plastics - have increased by 10% since June, Al-Morished said, expecting Tasnee to record an outstanding performance thanks to higher prices, compared to the COVID-19 outbreak period.

“Resuming lockdown measures in some European countries has no significant impact on the industry, however, the petrochemicals producers in the Kingdom will be negatively affected by the shutdown of factories there,” he noted.

Fawaz Al Fawaz, Global Chief Financial Officer, Tasnee, indicated that prices were sharply hit in H1 2020, due to the US-China trade disputes and the COVID-19 outbreak. However, some product prices, especially plastics, relatively rallied in Q3 2020 from $10 to $30, while some liquid petrochemicals products were still down.

Some markets, which use shale gas, are selling products at very competitive prices compared to those in the GCC region, said Al Fawaz, urging producers in Saudi Arabia not to hike feedstock prices since they are currently at reasonable levels, while gas prices drastically dropped in other foreign countries.