By: Thabet Shehata
Riyadh - Mubasher: Financial Analyst at Aljazira Capital, Jassim Al Jubran, expects stability to dominate the financial results of the Saudi petrochemicals sector for the first quarter of 2017, as higher feedstock costs could be offset by expansion and growing sales.
Al Jubran added to Mubasher that the petrochem sector is expected to see an improvement in cost reduction and spending control, with higher efficiency in operations, in preparation to the anticipated subsidiaries reduction for many of the feedstocks.
The positive sentiment towards the sector is also supported by the profitability of some of its companies especially after restructuring and reforms, such as in National Industrialization (Tasnee), or with production and operation costs reduction as in the case with SABIC.
Last year saw a positive performance for the petrochem sector, which raises expectations regarding performance in 2017, with higher operational capacity levels in many companies including Yansab and Kayan, Al Jubran indicated.
Oil prices are expected to jump to levels above $65 per barrel, due to the OPEC agreement which is expected to help a rapid rebalance in the oil market by the end of H1-17, which in return will help the prices of petrochemicals, he added.
