PLASTICS Industry Association Releases Analysis: Global Economic Outlook Revision Impact on Plastics Trade

The Plastics Industry Association (PLASTICS) has released an official analysis on the impact of the International Monetary Fund’s 2023 economic growth revision on the global plastics trade, authored by PLASTICS Chief Economist, Dr. Perc Pineda, as per Plasticsindustry.

Dr. Pineda writes, “According to the IMF's growth revisions, the global economy is anticipated to remain relatively stable from 2023 to 2024 but indicating a sideways movement. This projection has implications for the global plastics trade as well. While the industry can still expect growth opportunities in 2023, the subdued economic outlook for 2024 might pose some trade-related concerns.”

We remind, the International Energy Agency (IEA) on Friday said demand growth for oil next year will be slower than previously forecast, citing lackluster macroeconomic conditions, post-pandemic recovery running out of steam and burgeoning use of electric vehicles.

The Plastics Industry Association (PLASTICS) is the only organization that supports the entire plastics supply chain, including Equipment Suppliers, Material Suppliers, Processors and Recyclers, representing over one million workers in our USD468 billion U.S. industry.

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Aramco has established new Business Line Executive Vice President (“EVP”) positions in its Upstream and Downstream operating segments, said the company.

The creation of these positions follows the establishment in July of the Upstream President and Downstream President positions to help drive the Company’s long-term strategy across its value chain and global portfolio.

Therefore, as approved by the Board of Directors, the following four new Business Line EVP appointments will be effective from September 1, 2023:

Upstream: Abdul Hameed A. Al Dughaither has been appointed as Business Line Executive Vice President of Exploration, Petroleum Engineering & Drilling, and Abdulkarim A. Al Ghamdi has been appointed as Business Line Executive Vice President of Gas. Both positions report to the Upstream President.

Downstream: Ibrahim Q. Al Buainain has been appointed as Business Line Executive Vice President of Global Manufacturing, and Yasser M. Mufti has been appointed as Business Line Executive Vice President of Products & Customers. Both positions report to the Downstream President.

We remind, Aramco announced an additional near USD10 billion dividend, most of which will go to the government, the first of several extra payouts on top of its expected USD153 billion base dividend for 2022 and 2023. Aramco will begin paying performance-linked dividends with a USD9.87 billion payout in the third quarter, based on its full-year 2022 and first-half 2023 results, it said.

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Prices for diesel and other distillate fuel oils have surged as expectations for a soft landing and an improving economic outlook in the United States threaten to deplete already low inventories even further, said Reuters.

Futures prices for ultra-low sulfur diesel delivered in New York Harbor in September climbed to USD135 per barrel on Aug. 9, up from USD95 on May 31. Prices for diesel and other distillate fuel oils have been rising much faster than for crude petroleum, widening margins for refiners.

The crack spread for making diesel from U.S. crude, with both delivered in September 2023, has doubled to USD50 per barrel from USD25 at the end of April.

The crack for making diesel from U.S. crude, with both delivered in December 2023, has climbed to USD43 per barrel from USD27 at the end of April. Diesel prices are rising as traders anticipate that shortages will quickly re-emerge if the economy avoids falling into a recession later in 2023.

Distillate inventories have not recovered significantly despite the slowdown in manufacturing and freight activity evident since the middle of 2022. U.S. inventories amounted to 115 million barrels on August 4, up from 111 million a year ago, but otherwise the lowest for the time of year since 2000.

Inventories were 24 million barrels (-17% or -1.31 standard deviations) below the prior ten-year seasonal average on Aug. 4, based on data from the U.S. Energy Information Administration (EIA).

The deficit has widened rather than narrowed over the last five months from 12 million barrels (-9% or -0.73 standard deviations) on March 3 (“Weekly petroleum status report”, EIA, Aug. 9). The distillate shortage is a worldwide phenomenon, with inventories also 33 million barrels (-8% or -1.11 standard deviations) below the 10-year average in Europe at the end of July.

Singapore stocks were 3 million barrels (-30% or -1.79) below the 10-year average in the course of July, so there is limited scope for resolving the deficits by moving inventories from one region to another.

We remind, Saudi state oil giant Aramco (2222.SE) announced an additional near USD10 billion dividend, most of which will go to the government, the first of several extra payouts on top of its expected USD153 billion base dividend for 2022 and 2023.

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Saudi Aramco has informed customers in North Asia that they will receive the full volumes of crude oil they requested for September, multiple sources said on Friday, even as the unilateral voluntary output cut by the kingdom has been extended, said Reuters.

The world's top oil exporter announced last week that it would prolong the 1 million barrels-per-day (bpd) production reduction by another month to September and said the cut could be extended beyond that or even deepened.

Saudi Aramco CEO Amin Nasser on Monday said that the company's supplies to customers remain adequate. Chinese refiners did not request lower supply volumes for September-loading cargoes despite higher official selling prices (OSPs) set by Saudi Aramco, according to three trading sources.

They estimated some 50 million to 52 million barrels of Saudi crude to be taken by Chinese buyers, much higher than about 38 million barrels in August.

Some Chinese refiners have asked for less supply from Saudi Aramco over the past three months due to high oil prices, and have increased procurement from the Americas and West Africa.

We remind, Saudi state oil giant Aramco (2222.SE) announced an additional near USD10 billion dividend, most of which will go to the government, the first of several extra payouts on top of its expected USD153 billion base dividend for 2022 and 2023. Aramco will begin paying performance-linked dividends with a USD9.87 billion payout in the third quarter, based on its full-year 2022 and first-half 2023 results.

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Sadara Chemical Co has incurred a second-quarter 2023 net loss of Saudi riyal (SR) 1.39bn (USD371m), reversing a profit in the previous corresponding period, as sales slumped by 49%, said Argaam.

In a filing to the Saudi bourse Tadawul, Sadara cited lower average selling prices and sales volumes for the deterioration in its profitability on a year-on-year basis.

Sadara Chemical Co is a joint venture between state-owned energy giant Saudi Aramco and US major Dow Chemical.

In the first quarter of 2023, the company also incurred a net loss due to planned long-term turnarounds at its mixed-feed cracker and downstream polyethylene (PE) trains in Al Jubail.

We remind, Sadara Chemical Co., the parent company of Sadara Basic Services Co., reported a 97% slump in Q1 2022 net profit after Zakat and tax to SAR 45.9 million, compared to SAR 1.617 billion in the year-ago period. The company attributed the profit drop primarily to the recognition of SAR 1.05 billion gains from debt restructuring in Q1 2021. Sadara also cited a decline in higher production costs due to higher feedstock prices despite a rise in average sales price compared to the first quarter last year.

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