The slowdown in China’s economic growth has placed additional pressure on the sales of petrochemical producers in member states of the Gulf Cooperation Council (GCC).
Experts told Al-Sharq al-Awsat newspaper that petrochemical products’ prices slipped to a five-year low as a result of lower demand from China and other major Asian markets.
China’s devaluation of its currency and the rising value of the dollar made imported products less attractive to Chinese importers, the pundits noted, adding that this will adversely affect GCC producers.
Petrochemical products form Saudi Arabia’s largest non-oil sector and account for 70 per cent of the total Arab industrial activity.
Members of the GCC hold high global rankings in terms of the production of mono-ethylene glycol, methanol, ethylene, polypropylene, polyethylene and propylene.
The Saudi petrochemical industry is expected to benefit from the projected hike in demand from the emerging economies of the world. Upbeat projections expect global petrochemical output to reach 100 million tonnes.
In 2020, global petrochemical markets are expected to see fierce competition that might disrupt prices, but rising demand will lessen the impact, the report indicates.