Saturday, Jan 24, 2009
Gulf News
Riyadh: Saudi petrochemical products are expected to suffer a huge fall in prices this year, but a recovery could begin next year, an industry expert said.
"The magnitude of the crisis could not be predicted since the prices of petrochemical products are plummeting worldwide," said Sulaiman Bin Mohammad Al Mindeel, managing director of the Saudi Industrial Investment Group.
Speaking on the topic of the "Future of Saudi Petrochemicals in the Wake of the Global Financial Crisis" at the Riyadh Chamber of Commerce and Industry, Al Mindeel noted that whenever prices of crude oil increased, prices of natural gas also shot up. However, the prices of petrochemicals failed to respond accordingly.
According to Al Mindeel, there will be huge growth in the regional production of ethylene this year, especially in Saudi Arabia and Iran.
"As industrial investors, this is a factor of greater significance for us," he said, observing that Saudi Arabia and China will be the world's major players in the petrochemical industry over the next three years.
Referring to the announcement of a new pricing structure for petrochemicals by the petrochemical giant Saudi Basic Industries Corporation (Sabic), he said that it is expected that there will be a new pricing level for petrochemical products beginning in 2011.
This will be a higher price when compared with the existing prices that have been in force for nearly ten years, Al Mindeel said.
Looking into the future of the petrochemical industry, Al Mindeel said that the current plunge in prices would continue through this year and then make a slight rebound next year.
"We are expecting a recovery in the prices of petrochemical products by 2011, when the industry will be regaining its position after passing over the current turbulent period," he said.
Gulf News 2009. All rights reserved.
