SABIC cuts Al Jubail PE, PP ops on feedstock issues – buyers

04 October 2012 11:23  [Source: ICIS news]

SINGAPORE (ICIS)--Saudi petrochemical giant SABIC is running its polyethylene (PE) and polypropylene (PP) facilities in Al Jubail, Saudi Arabia at reduced operating rates because of gas feedstock issues, buyers of the company said on Thursday.

The plants affected have been running at lower run rates since the previous week, the buyers said, without specifying the exact operating rates.

The company could not be reached for comment.

It remains unclear when SABIC will ramp up the production at its facilities in Al Jubail, market sources said.

Most buyers across the Middle East said they have received reduced allocations for October delivery as a result of this lower production output.

“We have to cover the shortfall from other producers,” a PP converter based in United Arab Emirates (UAE) said.

“Our allocations were cut by more than half,” a separate PE, PP processor based in the Gulf Cooperation Council (GCC) region said.

Besides tight supply in the Middle East, SABIC cut its allocation to Pakistan and India, south Asian traders and converters said.

Consequently, offers by SABIC are largely higher than the rest of the GCC producers.

“It depends on how long this low run rate will last. Given the congestions at the Saudi Arabian ports, supply from Saudi Arabia in the near term will be low,” a Middle East PE, PP producer said.

“Prices maybe supported somehow because of the supply shortness, although demand is seeing signs of weakness heading to the end of the year,” a separate Middle East PE, PP maker said.

SABIC markets PP, PE from the following plants:

Company

Product

Nameplate capacity (kt/year)

Arabian Petrochemical Co (Petrokemya)

HDPE

400

LLDPE

400

Eastern Petrochemical (SHARQ)

HDPE

400

400

LLDPE

400

350

Al-Jubail Petrochemical Co (Kemya)

LLDPE

850

LDPE

220

Saudi Kayan Petrochemical Co

HDPE

400

PP

350

Ibn Zahr (Saudi European Petrochemical Co)

PP

320

PP

320

PP

500


By: Ong Sheau Ling
+65 6780 4359



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