Chemical commodity stocks, including those for Abu Qir Fertilizers, Misr Fertilizers Production Company – MOPCO, and Sidi Kerir Petrochemicals, rose sharply in the last two trading sessions, as global output price benchmarks continued to surge.

For Abu Qir Fertilizers and MOPCO, urea crossed the $290/tonne level in Asian markets, the highest this year as demand outpaced supplies, which has been attributed to Chinese producers being hit by a gas supply shortage.

Naeem Research sees that prices are expected to remain firm, if not increase higher, for the next few months. Its valuations on Abu Qir and MOPCO assume an average price of $265-$270/tonne, implying an 11% upside to cash-cost margins at current prices.

For Sidi Kerir Petrochemicals, its High Density Poly Ethylene (HDPE) touched $1,000/tonne for the first time since June 2019, and is up by more than 40% since hitting a low of $700/tonne in May this year during the height of the novel coronavirus (COVID-19) pandemic.

The price increase has been triggered by improving demand, which has, in turn, also led to higher oil and feedstock prices, as well as supply constraints. This is good news for Sdid Kerir as, at current prices, the petrochemicals producer will book a cash-cost margin of $600/tonne, up by $100/tonne on a quarter-to-date (QTD basis) in the fourth quarter (Q4) of 2020.

© 2020 Daily News Egypt. Provided by SyndiGate Media Inc. (Syndigate.info).

Disclaimer: The content of this article is syndicated or provided to this website from an external third party provider. We are not responsible for, and do not control, such external websites, entities, applications or media publishers. The body of the text is provided on an “as is” and “as available” basis and has not been edited in any way. Neither we nor our affiliates guarantee the accuracy of or endorse the views or opinions expressed in this article. Read our full disclaimer policy here.