Olefin/polymer feedstock supply concerns in Asia

Attacks on Saudi oilfields and refineries

A few days ago, market sources said that after Saudi Arabia's oil facilities were attacked on September 14, concerns about the supply of feedstocks to the Asian olefins and polymer markets have become increasingly appare.

Saudi Arabia's new energy minister, Prince Salman, said that on the morning of September 14, the Abqaiq oil processing facility and Khurais oilfield of Saudi Arabia's national oil company (Saudi Aramco) were attacked by drones, resulting in a reduction of about 7 million barrels per day, equivalent to at half of the company's production capaci.

Saudi petrochemical raw material supply cut off

Some Saudi petrochemical companies announced supply disruptions to raw materials following the atta.

Saudi Arabia is a major player in the global ethylene and ethylene derivatives market as most petrochemical companies in the country use ethane as the main feedstock and ethylene production is hi.

According to data, Saudi Arabia's total annual ethylene production capacity is about 15 million tons, accounting for about 9% of the world's total producti.

At the same time, Saudi Arabia is also a major methanol exporter in Asia, with a methanol production capacity of 55 million tons per ye.

Ethylene propylene prices are bullish

An ethylene trader believes that Asian ethylene market sentiment will rise, but it is unclear how mu.

S&P Global Platts had previously said Pengerang Refining and Petrochemicals planned to restart the cracker within the RAPID refining and petrochemical complex in Johor by mid-Septemb.

Of the three major olefin products, propylene is the most vulnerable to crude oil and refinery operational disruptions, as propylene is produced by fluid catalytic cracking units within refineri.

Pay close attention to the naphtha market

Market participants are keeping a close eye on the naphtha market, as a bull market is expected in naphtha that could reduce the petrochemical industry's already weak profit margi.

A naphtha trader said: "The reason for the sharp rise in naphtha prices last Monday morning is that a lot of naphtha in Asia comes from the Middle Ea.

According to market sources, Saudi Aramco is exporting 50,000 to 75,000 tons of naphtha every month from Yanbu Petrochemical, which is located on Saudi Arabia's Red Sea coast, to the Northeast Asian mark.