Saudi- Petrochem products show negative growth: Report 

(MENAFN - Arab News) March's stocks and oil prices declined while petrochemical selling prices remained relatively flat. Petrochemical products showed negative growth between of 2 and 5 percent. In terms of their performance, all stocks declined with the markets' slight correction, except Nama Chemicals that increased 48 percent. These figures are mentioned in a new report issued by NCB Capital.

According to the report, PetroRabigh and SHARQ (SABIC's subsidiary) are conducting their maintenance work at their LLDPE plants in April-May. Saudi Kayan started trial operations at its ethanolamines and ethoxylates plants in March 2012. Tasnee's paid-up capital increased by 20 percent to SR6.7 billion after its shareholders' approved the proposed 1 for 5 bonus issue on April 4.

Nama Chemicals' subsidiary JANA secured a SR117 million loan from Saudi Hollandi Bank through an Islamic financing facility to fund its projects.

The report indicates that SABIC plans to start trial operations for its new nonbottle applications for polyethylene terephthalate (PET) by June 2012. These new applications for PET are jointly developed by SABIC and the Austrian firm Starlinger. In addition, the company aims to initiate commercial operations at its new PET facility in Yanbu during 2013. This facility would have a production capacity of 420,000 mtpa.

Moreover, SABIC's subsidiary SHARQ is likely to close its LLDPE plants for one month to carry out maintenance work starting from early May 2012. SHARQ has two LLDPE plants jointly producing 750,000 mtpa. "We are currently 'Overweight' on SABIC with a price target of SR124.5," the report said.

"On March 27, 2012, Saudi Kayan announced that it has initiated trial runs at its ethanolamines and ethoxylates plants. The ethanolamines plant has annual production capacity of 100,000 mt. This news came in earlier than our expectations. The company stated that the output from this facility would be the first of its kind to be produced in Saudi Arabia. The exthoylates facility has an annual production capacity of 40,000 mt and can produce two types of ethoxylates -- alcohol ethoxylates and polyethylene glycols. We expect this facility to start commercial operations in 1Q 2013. We are currently 'Neutral' on Saudi Kayan with a price target of SR18.7," the report added.

The report commented on Tasnee's performance: "Tasnee's shareholders' approved the proposed 1 for 5 bonus issue. As a result, the company's paid-up capital increased by 20 percent to SR6.7 billion with 669 million number of outstanding shares (against the previous 557 million). By adjusting for the new number of shares, our price target has changed to SR36.7 from SR44.1 earlier. In addition, operations at the polypropylene facility of Tasnee's Saudi Polyolefins Co. were halted for 3-4 days due to some technical issues. This unplanned shutdown caused a production loss of about 2,000 mt. We are currently 'Neutral' on Tasnee with a price target of SR36.7."

Nama Chemicals' subsidiary JANA signed an Islamic financing facility of SR117mn with Saudi Hollandi Bank. The proceeds would be used to finance Nama Chemicals' ongoing expansion project, which would add 60,000 mtpa of epoxy resins to its existing capacity.

PetroRabigh plans to undertake a two-week-long maintenance at its LLDPE plant (having production capacity of 300,000 mtpa) around this time. The resultant production loss would lower PetroRabigh's LLDPE supply allocations to Southeast Asia by 30 percent, 50 percent and 30 percent for the months of April, May and June 2012, respectively, according to the report.