Saudi Arabia’s biggest stocks hit by petrochemical slide

Rising global petrochemical supplies have driven down prices, triggering sharp declines in some of Saudi Arabia’s biggest listed companies and weighing on a sector central to the kingdom’s diversification strategy.

The largest producer, Sabic — owned by Aramco — posted an unexpected fourth-quarter loss of 1.89 billion riyals ($504 million). “Challenges remain ongoing,” Sabic’s CEO said. All 10 listed Saudi petrochemical producers saw their stock prices drop over the past year, with analysts anticipating weak earnings from those yet to report, according to AGBI.

In the long term, demand for petrochemicals is expected to grow. While oil production may eventually peak, most analysts believe the petrochemicals industry will need to double output by 2050 to meet global market demand.