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Saudi Chemical Giant Sees Weak Global Demand Extending Into 2024

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9 months ago

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(Bloomberg) — The head of Saudi Arabia’s largest chemicals producer warned of another difficult year for the industry in 2024, as the outlook for the global economy remains weak.

Demand for chemicals — used to make plastics that go into anything from cars to mobile phones — has been hit by sluggish growth amid a slower-than-expected rebound from the Covid-19 pandemic. Margins in the sector have also been squeezed by inflation and higher energy costs.

Profit at Saudi Basic Industries Corp., the chemicals maker known as Sabic, has declined for five consecutive quarters year-on-year. It’s unclear whether the industry will rebound next year, said Abdulrahman Al-Fageeh chief executive officer of the company that’s owned by state oil producer Saudi Aramco.

This “was a bad year for the chemical industry,” the CEO said last week in an interview on the sidelines of a conference in Doha. “I’m not sure whether 2024 is going to have any pickup. It does not seem to be.”

Sabic’s varied portfolio of products has supported the Riyadh-based company’s margins, Al-Fageeh said. The company has capitalized on better conditions in agriculture and automotive businesses, he said.

Sabic is focused on developing technology to turn crude oil into chemicals, something it’s working on with Aramco, Al-Fageeh said. Traditionally, oil producers like Saudi Arabia have sold their crude to refiners, which process it into transport fuels and feedstocks for the chemical industry.

Now, as producers like Saudi Arabia prepare for a future in which oil demand, particularly for transport, is set to decline, Aramco and Sabic aim to funnel more crude into chemicals that will produce plastics for lightweight vehicles, batteries or mobile phones.

Sabic is working with Aramco on a 400,000 barrel-a-day crude-to-chemical facility planned for Ras Al Khair, an industrial city on Saudi Arabia’s east coast.

Al-Fageeh declined to comment on whether Sabic planned to sell a plant in the US. Bloomberg reported last month that the company and its partner TotalEnergies SE were considering selling a chemical plant in Louisiana.

The company is looking to internal expansion to boost growth, he said.

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Economy

S&P/TSX composite gains almost 100 points, U.S. stock markets also higher

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2 days ago

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September 13, 2024

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TORONTO – Strength in the base metal and technology sectors helped Canada’s main stock index gain almost 100 points on Friday, while U.S. stock markets also climbed higher.

The S&P/TSX composite index closed up 93.51 points at 23,568.65.

In New York, the Dow Jones industrial average was up 297.01 points at 41,393.78. The S&P 500 index was up 30.26 points at 5,626.02, while the Nasdaq composite was up 114.30 points at 17,683.98.

The Canadian dollar traded for 73.61 cents US compared with 73.58 cents US on Thursday.

The October crude oil contract was down 32 cents at US$68.65 per barrel and the October natural gas contract was down five cents at US$2.31 per mmBTU.

The December gold contract was up US$30.10 at US$2,610.70 an ounce and the December copper contract was up four cents US$4.24 a pound.

This report by The Canadian Press was first published Sept. 13, 2024.

Companies in this story: (TSX:GSPTSE, TSX:CADUSD)

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Economy

Statistics Canada reports wholesale sales higher in July

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September 13, 2024

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OTTAWA – Statistics Canada says wholesale sales, excluding petroleum, petroleum products, and other hydrocarbons and excluding oilseed and grain, rose 0.4 per cent to $82.7 billion in July.

The increase came as sales in the miscellaneous subsector gained three per cent to reach $10.5 billion in July, helped by strength in the agriculture supplies industry group, which rose 9.2 per cent.

The food, beverage and tobacco subsector added 1.7 per cent to total $15 billion in July.

The personal and household goods subsector fell 2.5 per cent to $12.1 billion.

In volume terms, overall wholesale sales rose 0.5 per cent in July.

Statistics Canada started including oilseed and grain as well as the petroleum and petroleum products subsector as part of wholesale trade last year, but is excluding the data from monthly analysis until there is enough historical data.

This report by The Canadian Press was first published Sept. 13, 2024.

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S&P/TSX composite up more than 150 points, U.S. stock markets mixed

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3 days ago

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September 12, 2024

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TORONTO – Canada’s main stock index was up more than 150 points in late-morning trading, helped by strength in the base metal and energy sectors, while U.S. stock markets were mixed.

The S&P/TSX composite index was up 172.18 points at 23,383.35.

In New York, the Dow Jones industrial average was down 34.99 points at 40,826.72. The S&P 500 index was up 10.56 points at 5,564.69, while the Nasdaq composite was up 74.84 points at 17,470.37.

The Canadian dollar traded for 73.55 cents US compared with 73.59 cents US on Wednesday.

The October crude oil contract was up $2.00 at US$69.31 per barrel and the October natural gas contract was up five cents at US$2.32 per mmBTU.

The December gold contract was up US$40.00 at US$2,582.40 an ounce and the December copper contract was up six cents at US$4.20 a pound.

This report by The Canadian Press was first published Sept. 12, 2024.

Companies in this story: (TSX:GSPTSE, TSX:CADUSD)

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