SNB Capital says petchem prices weighed down by economic outlook

06/06/2023 Argaam

Prices of petrochemical products extended their trend down due to the slowdown in demand recovery by China and production ramp-ups, in addition to the negative macroeconomic outlook, SNB Capital said in a note.

 

SNB Capital added that the drop in raw material prices in May could increase profit margins and earnings for Saudi producers in Q2 2023.

 

Since Q4 2022, the market has believed that reopening the Chinese market will be a key factor in stimulating industry recovery despite slower-than-expected demand. It will also boost forecasts for demand recovery from H2 2023 to early 2024. 

 

According to SNB Capital, the signing of an Indian deal prompted a urea price increase. However, oversupply and weak global demand will likely pressure prices.

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