Sabic prioritises Asia contract customers: Update

Adds details of ethylene supplies in paragraphs 9-10

State-owned Saudi petrochemical producer Sabic is prioritising deliveries to its contract customers in China and southeast Asia for September and October as its feedstock shortages ease.

Sabic earlier this week cancelled September polymer orders for some of its Asia-Pacific and Middle East customers, citing unforeseen production issues following last weekend's attacks on oil facilities in Saudi Arabia.

Sabic's feedstock supplies from state-owned Saudi Aramco have increased to 70pc of normal levels as of today. The supplies were cut to 51pc of usual levels when the curbs were implemented on 15 September.

The firm's Yansab affiliate said its feedstock supplies have increased to 83pc of normal levels from 70pc previously.

Sabic is continuing to stay away from the polymer spot market in Asia for now, despite the improved feedstock availability, and is giving priority to contract customers.

Sabic's subsidiaries produce polyethylene (PE) and polypropylene (PP) in the Saudi petrochemical hub of Jubail and Yanbu.

Saudi Kayan, a major Sabic affiliate in Jubail, produces 400,000 t/yr of high-density PE (HDPE), 300,000 t/yr of low-density PE (LDPE) and 350,000 t/yr of PP.

Yanbu-based Yansab produces 400,000 t/yr of PP, 400,000 t/yr of linear low-density polyethylene (LLDPE) and 400,000 t/yr of HDPE.

Key ethylene producers in Saudi Arabia are maintaining term supplies of the product to customers in Asia-Pacific, a major trader in Asia said. But market participants warned that ethylene supply issues may still emerge from Saudi Arabia.

"The impact is more on downstream markets like PE and MEG right now, but we are watching and expect the effect will come in 2-3 weeks' time," the trader said.