Saudi Arabia's state-owned producer Sabic is informing its Asia-Pacific and Middle East customers it is unable to meet existing polymer orders for September because of a feedstock shortage.
Sabic on 15 September said petrochemical feedstock supplies will be curbed for its subsidiaries in the aftermath of attacks on two key oil installations in Saudi Arabia. The weekend attacks at the Abqaiq plant, the world's largest crude processing facility, and the Khurais oil field infrastructure forced state-owned Saudi Aramco to shut in 5.7mn b/d of crude output.
Sabic cancelled September polymer orders for some of its Asia-Pacific and Middle East customers, citing unforeseen production issues. Sabic is unable to draw on sufficient polymer stocks to meet its shortfall.
Sabic subsidiaries produce polyethylene (PE) and polypropylene (PP) in the Saudi petrochemical hub of Jubail, where the feedstock shortage is the most acute.
Saudi Kayan, a Sabic affiliate in Jubail, is severely affected by the production cuts. It said its feedstock allocation will be reduced by 50pc.
Saudi Kayan produces 400,000 t/yr of high-density polyethylene (HDPE), 300,000 t/yr of low-density PE (LDPE) and 350,000 t/yr of PP. It also produces 1.48mn t/y of ethylene and 630,000 t/y of propylene to support its derivative polymer, ethylene oxide and ethylene glycol production.
Sabic yesterday informed customers it is unlikely to offer significant PE and PP volumes for October. Sabic typically offers new cargoes at the end of the month for its Asia-Pacific and Middle East customers.
Customers in Asia are now weighing their options to meet their October requirements and making various enquiries to PE and PP producers in southeast Asia, South Korea, India and the US.
Fellow Saudi producer Sadara said yesterday it expects feedstock supplies to be curtailed by 16pc. It operates a 750,000 t/yr linear LDPE/HDPE plant and a 350,000 t/yr LDPE unit in Jubail. Sadara, a joint venture between Aramco and US producer Dow, produces downstream petrochemicals such as polyols, isocyanates and glycols utilizing a mixed feed cracker.