Nama Chemicals CEO says product prices drop 38% in H2 2022; market outlook ‘foggy’

Abdullah Al-Salem, CEO of Nama Chemicals Co.

Abdullah Al-Salem, CEO of Nama Chemicals Co., attributed lower product prices to subdued demand, which has not recovered since the pandemic. 

In a phone call with Argaam, Al-Salem said price and demand levels improved in 2021 and early 2022. However, the second half of 2022 saw a significant slowdown and a drop of up to 38% in product selling prices, compared to the first half of the year when prices were at good levels. 

The sharp decline in prices amid higher raw material costs largely weighed on profit margins, leading to losses in the fourth quarter of 2022.

Al-Salem also pointed to a rise of nearly10% quarter-on-quarter in the sales volumes of main products during Q4 2022, and a 5% decline in total volumes during the same period.

Meanwhile, the CEO said that prices are declining, but at a slower pace. Some product prices are stable; however, the market outlook is “foggy” on the global level.

Nama currently focuses on utilizing capacities, improving plant reliability and reducing production costs, Al-Salem concluded, ruling out new investments to boost production in the next couple of years.

The chemicals producer made a profit of SAR 37 million in 2022, a leap of 34% from SAR 27.7 million in 2021. In Q4 2022, it swung to a net loss of SAR 17.7 million, against a net profit of SAR 3.28 million in the prior-year period, Argaam reported.