The head of the world's largest petrochemical producer foresees a sluggish start to next year, with weaker demand during the fourth quarter expected to carry into next year.
But Mohamed Al Mady, the chief executive of Saudi Basic Industries Corporation, or Sabic, is optimistic that demand will recover later in the year. Mr Al Mady believes that in spite of the euro zone's financial malaise, Europe will experience slight growth. The US would similarly avoid a double-dip recession, and growth would continue in Asia in spite of government efforts to curb inflation, he said.
"If that growth forecast prevails, it should be a good year for the industry. Financial results should receive an additional boost due to the improving industry operating rate and new capacity coming on stream," Mr Al Mady told delegates at the Gulf Petrochemicals and Chemicals Association annual conference in Dubai yesterday.
Sabic remains focused on growth in order to profit from rising demand in Asia. Saudi Arabia exported 20.3 million tonnes of petrochemical products in the first eight months of the calendar year, according to figures released by the Saudi Ports Authority.
Asia and Europe will remain the main markets of the Middle Eastern petrochemical industry for some time to come, according to industry experts.
Sabic is also developing a method to convert crude oil into petrochemicals without passing it through a refinery, Prince Faisal bin Turki, an adviser to the Saudi ministry of petroleum and mineral resources, told the conference.
* with Bloomberg News
Saudi natural gas prices, b9