Petrochemical Round Up - October 2011[1]

8/3/2019 Petrochemical Round Up - October 2011[1]

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Sunday, 30 October 2011

Page 1

Petrochemicals Round Up

CONTENTSNews, Update & Analysis 1Index Performance 2Commodity Price Monitor 3Commodity Performance Charts 4Price Oil, Gas and Naphtha 4Price & Margins Basic Petrochemicals 5Price & Margins Ethylene and Propylene Derivatives 6Price & Margins Methanol and Derivatives 7Price & Margins Vinyls and Derivatives 7Prices- Grains & Fertilizers 8Prices- Commodity Index and Metals 9Monthly Crude Steel production (000 tonnes) 10Price Performance- GCC Petrochemical Companies and Indices 11GCC Petrochemical Companies- Price Performance Charts 12Relative Valuation Chemical Universe 13Company Forward Valuation Charts- PE and PBV 14Major GCC Listed Petrochemical Companies- Product Portfolio 16GCC Petrochemical Industry - Project Monitor 17

News, Update & AnalysisSABIC leads Saudi Petrochemical companies 3Q11 earnings growthSaudi Arabias petrochemical companies 3Q11 earnings increased 66% YoY and5% QoQ led by SABIC, reporting SAR 8.2bn in 3Q11 earnings; 2% aboveconsensus estimate. Overall, performance of regional petrochemical companieswere mixed with APC, Chemanol, SAFCO, SABIC and SIPCHEM reporting betterthan expected earnings while other stocks such as IQCD, Sahara, Tasnee, SIIG,Yansab, Rabigh and Kayan disappointed during the quarter.

Weakness in polymer prices affected QoQ performance of APC, Yansab andSahara petrochemicals, and was one of the reasons for lower than estimatedearnings for Tasnee during the quarter.

Exhibit 1: Petchem earnings snapshot versus estimates

CompanyM.Cap

(USD mn) 3Q11 2Q11 3Q10 YoY QoQ3Q11Cons Var (%)

Sabic 75,996 8,185 8,101 5,326 54% 1% 8,033 2%

Safco 12,299 1,211 790 604 100% 53% 1,076 13%

Kayan 7,080 (35) (16) (5) NM NM (14) NM

Yansab 6,615 828 964 356 132% -14% 902 -8%

Tasnee 5,856 725 594 373 94% 22% 749 -3%

Rabigh 5,302 (281) (402) (237) NM NM 198 NM

Petrochem 2,752 (13) (12) (3) NM NM (13) NM

SIIG 2,304 143 147 46 212% -3% 194 -26%

Sipchem 1,916 208 165 84 148% 26% 183 14%

Sahara 1,494 98 209 69 42% -53% 154 -37%

APC 1,044 135 156 121 12% -13% 123 10%

Chemanol 375 27 11 (16) NM 151% 14 94%Alujain 327 23 (19) 16 39% NM NA NM

Nama 314 (29) 17 13 NM NM NA NM

S au di Pet ch ems 12 3, 67 3 11,225 10,703 6,747 66% 5%IQCD 19,182 2,074 2,076 1,425 46% 0% 2,206 -6%

(local currency mn)

Source: Bloomberg, SICO Research

www.sicobahrain.com

SICOResearch

SICO 2011 All Rights ReservedAttention is drawn to the disclaimer and other information on 18

[email protected]
http://sicobahrain.com/main/Research/Petrochemicals%20Weekly/October%202011/Commodity%20Monitor.docm%23_Toc307731502http://sicobahrain.com/main/Research/Petrochemicals%20Weekly/October%202011/Commodity%20Monitor.docm%23_Toc307731502http://sicobahrain.com/main/Research/Petrochemicals%20Weekly/October%202011/Commodity%20Monitor.docm%23_Toc307731502http://sicobahrain.com/main/Research/Petrochemicals%20Weekly/October%202011/Commodity%20Monitor.docm%23_Toc307731502


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Page 2

Petrochemicals Round UpSaudi Petrochem Index (SASEPETR) increased 2.2% since our last update on September 15 th, 2011 outperforming

both S&P 500 Chemical Index and Tadawul, which increased 0.9% and 0.8%, respectively during this period.

SASEPETRs outperformance was largely led by SABIC, which increased 3.5% during this period after reportingstrong 3Q11 earnings.

Index PerformanceSASEPETR vs S&P 500 Chemical Index vs Tadawul

0

50

100

150

200

250

Jan

-07

Mar-

07

May

-07

Jul-07

Sep

-07

Nov

-07

Jan

-08

Mar-

08

May

-08

Jul-08

Aug

-08

Oct-

08

Dec

-08

Fe

b-0

9

Apr-

09

Jun

-09

Aug

-09

Oct-

09

Dec

-09

Fe

b-1

0

Apr-

10

Jun

-10

Aug

-10

Oct-

10

Dec

-10

Fe

b-1

1

Apr-

11

Jun

-11

Aug

-11

Oct-

11

SASEPETR INDEX S5CHEM INDEX SASEIDX INDEX

Source: Bloomberg Note: Rebased to 100 as at Jan, 2007

Saudi Chemanol halted operations for 12 daysSaudi Chemanol halted operations in its methanol and dimethylformamide plants for 12 days in order to implementsome technical improvements to boost the two plants' productivity. The company expects the impact on its 4Q11financials to be limited, as it has enough inventories to meet its commitments. The company restarted operations onOctober 24th after successfully finishing improvements.

Saudi Kayan begins commercial production at Jubail plantSaudi Kayan has begun commercial production at the company's petrochemical complex in Jubail Industrial City.Most of the production plant's units are now operational, including the companys 350,000 ton -per-year (t/y)polypropylene plant, 400,000 t/y polyethylene plant, 260,000 t/y polycarbonate plant, and 566,000 t/y ethyleneglycol plant. Once fully operational, the complex will have an overall capacity of 4mn t/y. The move is expected tohave an impact on the company's financial performance in 4Q11.

Borouge III to be fully operational by mid-2014The third phase of Abu Dhabi-based polymer producer, Borouge, being built at an estimated cost of USD 4.5bn willbe completed on schedule by end 2013 with plant fully operational by mid-2014. The combined production capacityof Borouge I and II is two million metric tonnes a year. By mid-2014, when Borouge III comes on stream, Borouge'scapacity will increase to 4.5 million tonnes a year, making it the single-largest polyolefins plant in the world.

Petro Rabigh likely to sell more shares to fund expansionRabigh intends to sell additional shares to existing and new investors in order to fund a plan to double itspetrochemical output. According to MEED, Rabigh has received all bids for the engineering, procurement andconstruction contracts for the USD 5-8bn Rabigh II upgrade project set to double chemical capacity to over 4 mntonnes pa. A final investment decision is likely by end-2011 and the financing will be arranged Q1 2012.


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Page 3

Petrochemicals Round UpCommodity Price Monitor

C u r r e n t2 8 - O c t - 1 1

WTI Crude ($/bbl) 93.32 87.2 7.0% 86.5 7.9% 91.4 2.1% 79.2 17.8% 95.7 -2.5% 81.4 14.6%

Natural Gas( $/mcf) 3.63 3.55 2.3% 4.10 -11.5% 4.23 -14.2% 3.67 -1.1% 4.26 -14.8% 3.35 8.4%

Naphtha($/mt) 877 884 -0.8% 974 -10.0% 877 0.0% 901 -2.7% 999 -12.2% 768 14.1%

Ethylene($/mt) 985 985 0.0% 1,065 -7.5% 1,145 -14.0% 1,020 -3.4% 1,110 -11.3% 1,015 -3.0%

Propylene($/mt) 1,240 1,240 0.0% 1,510 -17.9% 1,220 1.6% 1,380 -10.1% 1,510 -17.9% 1,110 11.7%

Benzene($/mt) 980 980 0.0% 1,160 -15.5% 1,030 -4.9% 1,035 -5.3% 1,210 - 19.0% 940 4.3%

Butadiene($/mt) 2,010 2,010 0.0% 3,590 -44.0% 2,020 -0.5% 2,640 -23.9% 3,930 -48.9% 1,970 2.0%

HDPE($/mt) 1,315 1,315 0.0% 1,370 -4.0% 1,260 4.4% 1,345 -2.2% 1,405 -6.4% 1,265 4.0%

LDPE($/mt) 1,425 1,425 0.0% 1,530 -6.9% 1,660 -14.2% 1,480 -3.7% 1,570 -9.2% 1,575 -9.5%

LLDPE($/mt) 1,205 1,205 0.0% 1,320 -8.7% 1,360 -11.4% 1,240 -2.8% 1,395 -13.6% 1,325 -9.1%

PP($/mt) 1,375 1,375 0.0% 1,545 -11.0% 1,470 -6.5% 1,460 -5.8% 1,600 - 14.1% 1,390 -1.1%

PS($/mt) 1,660 1,660 0.0% 1,810 -8.3% 1,485 11.8% 1,745 -4.9% 1,790 -7.3% 1,450 14.5%

PVC($/mt) 895 895 0.0% 1,100 -18.6% 1,015 -11.8% 970 -7.7% 1,120 -20.1% 1,010 -11.4%

Methanol($/ton) 415 415 0.0% 390 6.4% 355 16.9% 415 0.0% 400 3.8% 345 20.3%

MEG($/mt) 1,120 1,120 0.0% 1,280 -12.5% 1,095 2.3% 1,230 -8.9% 1,230 -8.9% 960 16.7%

Styrene ($/mt) 1,285 1,285 0.0% 1,490 -13.8% 1,360 -5.5% 1,390 -7.6% 1,545 -16.8% 1,245 3.2%

EDC ($/mt) 320 320 0.0% 445 -28.1% 485 -34.0% 405 -21.0% 455 -29.7% 565 -43.4%

VCM ($/mt) 755 755 0.0% 875 -13.7% 915 -17.5% 825 -8.5% 920 -17.9% 875 -13.7%

PTA ($/mt) 1,090 1,090 0.0% 1,305 -16.5% 1,235 - 11.7% 1,215 - 10.3% 1,225 -11.0% 1,060 2.8%

Fe r t i l i ze r sAmmonia($/ton) 550 545 0.9% 500 10.0% 395 39.2% 540 1.9% 480 14.6% 410 34.1%

Urea($/ton) 510 500 2.0% 506 0.8% 385 32.5% 520 -1.9% 500 2.0% 355 43.7%

DAP($/MT) 630 635 -0.8% 648 -2.7% 595 5.9% 635 -0.8% 670 -6.0% 573 10.0%

M e t a l sTurkey Steel Rebar($/t) 678 679 -0.2% 716 -5.4% 650 4.2% 718 -5.6% 755 -10.3% 573 18.3%China expt billet($/t) 753 738 2.0% 876 -14.1% 786 -4.2% 798 -5.7% 873 -13.8% 739 1.8%

China Iron ore ($/t) 157 169 -7.2% 185 -15.0% 176 -10.7% 184 -14.6% 182 -13.6% 156 0.3%

Aluminium($/t) 2,223 2,104 5.7% 2,400 -7.3% 2,461 -9.7% 2,124 4.7% 2,597 -14.4% 2,316 -4.0%

%c h a n g e1 w e e ka g o %c h a n g e B e g . O fQ tr %c h a n g e Y T DP e r f . %c h a n g e 1 m t ha g o %c h a n g e 3 m t h sa g o %c h a n g e 1 y e a ra g o

Source: Bloomberg, LME, Polymer update, SICO Research


4/18


Page 4

Petrochemicals Round UpCommodity Performance Charts

.

7%

1%

20%

-9%

15%

-3%

7%

38%

33%

47%

18%

-50% 0% 50% 100%

WTI CRUDE

NYMEX GAS

NAPHTHA

ETHYLENE

PROPYLENE

LDPE

PP

METHANOL

AMMONIA

UREA

REBAR

Av erage Price: MTD vs. Same Pe riodLas t Year

9.7%

-2.4%

24.2%

-5.7%

14.9%

0.0%

8.7%

43.9%

39.7%

53.8%

17.4%

-50% 0% 50% 100%

WTI CRUDE

NYMEX GAS

NAPHTHA

ETHYLENE

PROPYLENE

LDPE

PP

METHANOL

AMMONIA

UREA

REBAR

Av erage Price: QTD vs. SamePer iod Last Year

21.8%

-10.4%

35.8%

8.5%

23.9%

12.8%

20.8%

33.4%

44.8%

58.4%

22.9%

-50% 0% 50% 100%

WTI CRUDE

NYMEX GAS

NAPHTHA

ETHYLENE

PROPYLENE

LDPE

PP

METHANOL

AMMONIA

UREA

REBAR

Av erage Price: YTD vs. Same PeriodLas t Year


Commodity prices & indicative margins for week ended October 28, 2011Price Oil, Gas and Naphtha

Naphtha

0

20

40

60

80

100

120

140

160

Jan-05

May-05

Sep-05

Jan-0

6

May-0

6

Sep-0

6

Jan-07

May-07

Sep-07

Jan-0

8

May-0

8

Sep-0

8

Jan-0

9

May-0

9

Sep-0

9

Jan-1

0

May-1

0

Sep-1

0

Jan-11

May-11

Sep-11

WTI CRUDE($/bbl)

0

2

4

6

8

10

12

14

16

Jan-05

May-05

Sep-05

Jan-0

6

May-0

6

Sep-0

6

Jan-07

May-07

Sep-07

Jan-0

8

May-0

8

Sep-0

8

Jan-0

9

May-0

9

Sep-0

9

Jan-1

0

May-1

0

Sep-1

0

Jan-11

May-11

Sep-11

NYMEX GAS($/mcf)

0

200

400

600

800

1,000

1,200

1,400

Jan-05

Jun-05

Nov-05

Apr-06

Sep-0

6

Feb-07

Jul-07

Dec-07

May-0

8

Oct-08

Mar-09

Aug-0

9

Jan-1

0

Jun-1

0

Nov-1

0

Apr-11

Sep-11

NAPHTHA ($/MT)



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Page 5

Petrochemicals Round UpPrice & Margins Basic Petrochemicals

0

100

200

300

400

500

600

700800

900

0

200

400

600

800

1,000

1,200

1,4001,600

1,800

Jan-05

May-05

Sep-05

Jan-0

6

May-0

6

Sep-0

6

Jan-07

May-07

Sep-07

Jan-0

8

May-0

8

Sep-0

8

Jan-0

9

May-0

9

Sep-0

9

Jan-1

0

May-1

0

Sep-1

0

Jan-11

May-11

Sep-11

Ethylene ($/MT)

Price(LHS) Margins(RHS)

(100)0100200300400500600700800

900

0

500

1,000

1,500

2,000

Jan-05

May-05

Sep-05

Jan-0

6

May-0

6

Sep-0

6

Jan-07

May-07

Sep-07

Jan-0

8

May-0

8

Sep-0

8

Jan-0

9

May-0

9

Sep-0

9

Jan-1

0

May-1

0

Sep-1

0

Jan-11

May-11

Sep-11

Propylene ($/MT)


(500)

0

500

1,000

1,500

2,000

2,500

3,000

3,500

0

500

1,000

1,500

2,000

2,500

3,000

3,500

4,000

4,500

Jan-05

May-05

Sep-05

Jan-0

6

May-0

6

Sep-0

6

Jan-07

May-07

Sep-07

Jan-0

8

May-0

8

Sep-0

8

Jan-0

9

May-0

9

Sep-0

9

Jan-1

0

May-1

0

Sep-1

0

Jan-11

May-11

Sep-11

Butadiene ($/MT)


(100.0)

0.0

100.0

200.0

300.0

400.0

500.0

600.0700.0

800.0

0

200

400

600

800

1000

1200

1400

1600

Jan-05 Jan-06 Jan-07 Jan-08 Jan-09 Jan-10 Jan-11

Benzene ($/MT)

Prices(LHS) Margins(RHS)



6/18


Page 6

Petrochemicals Round UpPrice & Margins Ethylene and Propylene Derivatives



7/18


Page 7

Petrochemicals Round UpPrice & Margins Methanol and Derivatives

(400)

(300)

(200)

(100)

0

100

200

300

400

500

0

100

200

300

400

500

600

700

Jan-05

May-05

Sep-05

Jan-0

6

May-0

6

Sep-0

6

Jan-07

May-07

Sep-07

Jan-0

8

May-0

8

Sep-0

8

Jan-0

9

May-0

9

Sep-0

9

Jan-1

0

May-1

0

Sep-1

0

Jan-11

May-11

Sep-11

METHANOL ($/MT)

Pri ce(LHS) Margins(RHS )

(200)

(100)

0

100

200

300

400

500

600

700

800

0

200

400

600

800

1,000

1,200

1,400

1,600

Jan-05

May-05

Sep-05

Jan-0

6

May-0

6

Sep-0

6

Jan-07

May-07

Sep-07

Jan-0

8

May-0

8

Sep-0

8

Jan-0

9

May-0

9

Sep-0

9

Jan-1

0

May-1

0

Sep-1

0

Jan-11

May-11

Sep-11

MTBE ($/MT)

Pri ce(LHS) Margins(RHS )


Price & Margins Vinyls and Derivatives

(150)

(100)

(50)

0

50

100150

200

250

300

350

0

200

400

600

800

1,000

1,200

Ja0

Ma0

S0

Ja0

Ma0

S0

Ja0

Ma0

S0

Ja0

Ma0

S0

Ja0

Ma0

S0

Ja1

Ma1

S1

Ja1

Ma1

S1

VCM($/MT)


0

50

100

150

200

250

300

350

0

200

400

600

800

1,000

1,200

1,400

Ja0

Ma0

S0

Ja0

Ma0

S0

Ja0

Ma0

S0

Ja0

Ma0

S0

Ja0

Ma0

S0

Ja1

Ma1

S1

Ja1

Ma1

S1

PVC ($/MT)




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9/18


Page 9

Petrochemicals Round UpPrices- Commodity Index and Metals

0

100

200

300

400

500

600

700

Ja

n-05

Ma

y-05

Se

p-05

Ja

n-0

6

Ma

y-0

6

Se

p-0

6

Ja

n-07

Ma

y-07

Se

p-07

Ja

n-0

8

Ma

y-0

8

Se

p-0

8

Ja

n-0

9

Ma

y-0

9

Se

p-0

9

Ja

n-1

0

Ma

y-1

0

Se

p-1

0

Ja

n-11

Ma

y-11

Se

p-11

CRB CMDT INDEX

0

200

400

600

800

1,000

1,200

1,400

1,600

1,800

De

c-05

Ap

r-06

Aug-0

6

De

c-0

6

Ap

r-07

Aug-07

De

c-07

Ap

r-08

Aug-0

8

De

c-0

8

Ap

r-09

Aug-0

9

De

c-0

9

Ap

r-10

Aug-1

0

De

c-1

0

Ap

r-11

Aug-11

TURKEY EXP. STEEL REBAR ($/MT)

0

50

100

150

200

250

Jan-05

May-05

Sep-05

Jan-06

May-06

Sep-06

Jan-07

May-07

Sep-07

Jan-08

May-08

Sep-08

Jan-09

May-09

Sep-09

Jan-10

May-10

Sep-10

Jan-11

May-11

Sep-11

STEEL CHINA IRON ORE ($/MT)

0

500

1000

1500

2000

2500

3000

3500

Jan-05

May-05

Sep-05

Jan-0

6

May-0

6

Sep-06

Jan-07

May-07

Sep-07

Jan-0

8

May-0

8

Sep-08

Jan-0

9

May-0

9

Sep-09

Jan-1

0

May-1

0

Sep-10

Jan-11

May-11

Sep-11

$/MT

ALUMINIUM ($/ MT)



10/18


Page 10

Petrochemicals Round UpMonthly Crude Steel production (000 tonnes)

0%

50%

100%

150%

200%

250%

0

20

40

60

80

100

120

140

160

180

200

Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec

Qa t a r

-40%

-20%

0%

20%

40%

60%

80%

100%

120%

140%

160%

0

50

100

150

200

250

300

350

400

450

500


Sau di Arabia

-5%

0%

5%

10%

15%

20%

25%

30%

35%

0

100

200

300

400

500

600

700


E g yp t

-5%

0%

5%

10%

15%

20%

25%

30%

35%

0

200

400

600

800

1,000

1,200

1,400

1,600

1,800

2,000


Mid dle Eas t

2009 2010 2011 Growth(2010/09) Growth(2011/10)

0%

5%

10%

15%

20%

25%

30%

35%

40%

0

20,000

40,000

60,000

80,000

100,000

120,000

140,000


W o r l d

0%

10%

20%

30%

40%

50%

60%

0

500

1,000

1,500

2,000

2,500

3,000

3,500


Turkey

Source: IISI, SICO ResearchNote Middle East includes Saudi Arabia, Qatar, and Iran.


11/18


Page 11

Petrochemicals Round UpPrice Performance- GCC Petrochemical Companies and Indices

Name Price Crncy 3 Mo. Avg Daily1 Day 1 week 1 month 1 year Low High Turnover ($mn)Middle East

SABIC 98.25 SAR 3.4% 5.6% 6.2% 1.3% 82.5 114.0 185

SAFCO 185.25 SAR 0.7% 1.1% 1.8% 27.3% 142.3 194.3 6

SIPCHEM 20.05 SAR 2.0% 4.7% 11.1% -11.4% 15.9 26.1 7

Ind. Qatar 129.90 QAR 2.3% 3.2% 4.8% 12.0% 113.8 154.5 13

Saudi Kayan 18.10 SAR 2.0% 5.2% 6.5% 2.5% 14.0 20.3 25

CHEMANOL 11.75 SAR 0.9% 0.4% 2.6% -16.1% 10.1 16.8 4

PetroRabigh 22.85 SAR 1.1% 0.0% -6.5% 1.1% 18.3 30.1 12

YANSAB 45.00 SAR 2.0% 2.3% -0.4% 6.6% 37.5 53.5 18

APPC 27.90 SAR 0.7% 0.0% -2.8% 7.7% 22.5 35.7 7

ALCO 17.95 SAR 1.1% -1.1% -4.0% -6.3% 15.5 25.0 6

NIC 40.40 SAR 2.0% 1.8% 2.5% 42.9% 25.6 45.2 17

SIIG 19.55 SAR 1.6% 0.3% 0.5% 3.4% 15.8 28.0 6

Sahara Petro. 19.65 SAR 2.6% 3.4% -6.0% -15.5% 14.9 27.6 13

Nama Chem. 9.30 SAR 1.6% 1.1% 0.0% -7.5% 8.2 12.8 5

Boubyan Petro 560.00 KWD 0.0% 0.0% -1.8% 1.8% 470.0 620.0 0

Al Qurain 222.00 KWD -0.9% -0.9% 1.8% -7.5% 166.0 238.0 0

North AmericaWestlake 43.14 USD 0.9% 14.6% 25.8% 35.0% 31.3 67.8 20

Dow 29.25 USD 0.5% 7.4% 30.2% -5.2% 20.6 42.2 367

Eastman 41.92 USD 4.7% 11.9% 22.3% 6.7% 32.4 55.4 94

Methanex 26.59 USD -0.4% 6.1% 27.6% -4.2% 19.5 34.9 8

Ashland Inc. 55.57 USD 1.1% 13.2% 25.9% 7.6% 41.1 69.5 58

EuropeYara 271.30 NOK -1.5% 6.0% 19.2% -11.9% 200.5 352.5 119

Akzo Nobel 39.47 EUR 1.1% 5.8% 18.4% -7.5% 29.3 53.7 32

BASF 54.66 EUR 0.4% 8.5% 19.2% 4.2% 42.2 70.2 233

AsiaHonam 323,000.0 KRW 1.6% 11.8% 11.0% 30.2% 218,000.0 475,500.0 103

Sumitomo 306.00 JPY 3.0% 10.5% 1.7% -12.8% 273.0 472.0 38

Taiwan Fert. 80.00 TWD 2.3% 11.4% 6.5% -23.4% 66.6 118.0 22

Formosa Plast. 89.30 TWD 1.4% 4.4% 9.3% 1.7% 76.0 117.0 32

IndicesSASEPETR 6,367.92 2.4% 3.6% 3.5% 6.4% 5,086.5 7,122.0

S5CHEM 314.76 0.1% 5.5% 22.0% 10.2% 245.5 344.5SASEIDX 6,235.64 1.4% 2.1% 2.0% -1.9% 5,231.5 6,795.3

DSM 8,535.68 0.8% 2.1% 1.3% 9.4% 7,489.3 9,290.2

Source: Bloomberg

Price change (%) Price (52-Week)

Source: Bloomberg.


12/18


Page 12

Petrochemicals Round UpGCC Petrochemical Companies- Price Performance Charts

2.6%

-6.5%

-0.4%

-2.8%

-4.0%

2.5%

-6.0%

0.0%

4.1%

-1.8%

1.8%

3.5%

22.0%

2.0%

1.7%

3.5%

22.0%

2.0%

-20% 0% 20% 40%

CHEMANOL

PetroRabigh

YANSAB

APPC

ALCO

NIC

Sahara Petro.

Nama Chem.

Sidi Kerir

Boubyan Petro

Al Qurain

SASEPETR

S5CHEM

SASEIDX

DSM

SASEPETR

S5CHEM

SASEIDX

QTD performance

-27.2%

1.8%

-5.5%

2.6%-19.5%

25.2%

-17.1%

-16.6%-13.0%

3.7%

18.1%

-2.3%

1.8%

-5.8%

-1.7%

-2.3%

1.8%

-5.8%

-40% -20% 0% 20% 40%

CHEMANOL

PetroRabigh

YANSAB

APPC

ALCO

NIC

Sahara Petro.

Nama Chem.Sidi Kerir

Boubyan Petro

Al Qurain

SASEPETR

S5CHEM

SASEIDX

DSM

SASEPETR

S5CHEM

SASEIDX

YTD performance

2.6%

-6.5%

-0.4%

-2.8%-4.0%

2.5%

-6.0%

0.0%

4.1%

-1.8%

1.8%

3.5%

22.0%

2.0%

1.7%

3.5%

22.0%

2.0%

-10% 0% 10% 20% 30%

CHEMANOL

PetroRabigh

YANSAB

APPC

ALCO

NIC

Sahara Petro.

Nama Chem.

Sidi Kerir

Boubyan Petro

Al Qurain

SASEPETR

S5CHEM

SASEIDX

DSM

SASEPETR

S5CHEM

SASEIDX

MTD performance

Source: Bloomberg.


13/18


Page 13

Petrochemicals Round UpRelative Valuation Chemical Universe

2 0 1 0 2 0 1 1 E 2 0 1 2 E 2 0 1 0 2 0 1 1 E 2 0 1 2 E 2 0 1 0 2 0 1 1 E 2 0 1 2 E 2 0 1 0 2 0 1 1 E 2 0 1 2 E 2 0 0 9 2 0 1 0 2 0 1 1 E 2 0 1 2 EM i d d l e E a s tSABIC KSA 98.25 78,592 13.7 10.0 10.0 137% 37% 0% 8.2 6.6 6.4 2.4 2.1 1.9 3.1% 3.6% 4.1% 4.3%

SAFCO KSA 185.25 12,349 14.3 12.6 12.6 79% 13% 1% 15.2 11.9 11.8 6.5 6.0 5.5 6.5% 6.5% 6.6% 6.6%

SIPCHEM KSA 20.05 1,960 19.5 12.0 11.0 169% 63% 9% 11.0 7.7 7.2 1.5 1.3 1.2 4.5% 4.5% 3.6% 3.6%

Ind. Qatar Qatar 129.9 19,621 12.8 8.7 8.6 12% 47% 1% 12.5 8.2 7.8 3.3 2.7 2.3 3.8% 4.2% 5.5% 5.7%

Saudi Kayan KSA 18.1 7,239 NM 64.6 11.2 NM NM 480% NM 35.8 11.1 1.8 1.7 1.5 0.0% - 0.2% 0.6%

CHEMANOL KSA 11.75 378 235.0 18.0 11.4 -72% 1206% 58% 20.1 9.8 8.2 1.0 1.0 0.9 0.0% 0.0% 1.7% 2.6%

PetroRabigh KSA 22.85 5,337 95.2 12.5 7.8 NM 662% 60% 22.9 12.1 9.2 2.5 2.1 1.6 0.0% - 0.0% 0.0%

YANSAB KSA 45 6,749 15.1 8.2 8.3 NM 85% -2% 12.8 8.3 8.2 3.4 2.6 2.0 0.0% 0.0% 1.1% 2.2%

APPC KSA 27.9 1,052 12.0 8.4 9.3 158% 43% -10% 8.1 6.6 6.9 2.2 1.9 1.7 3.6% 6.3% 6.3% 5.7%

ALCO KSA 17.95 331 29.4 NA NA NM NA NA 19.2 NA NA 2.2 NA NA 0.0% 0.0% NA NA

NAMA KSA 9.3 319 34.4 NA NA NM NA NA 28.0 NA NA 0.7 NA NA 0.0% 0.0% NA NA

Sahara Petro. KSA 19.65 1,533 17.4 9.4 8.6 223% 85% 10% NM 18.6 12.9 1.7 1.5 1.3 0.0% 0.0% 2.3% 2.4%

SIIG KSA 19.55 2,346 21.7 15.3 8.7 32% 42% 75% 32.4 26.0 8.4 1.5 1.4 1.3 2.6% 2.6% NA 3.1%

National Ind. KSA 40.4 6,005 15.3 9.2 9.3 183% 66% -1% 9.8 6.9 7.0 2.4 2.1 1.8 1.5% 2.3% 3.4% 3.5%

N o r t h A m e r i c aWestlake U.S. 43.14 2,873 12.9 10.1 10.8 319% 27% -6% 5.8 4.7 4.9 1.9 1.6 1.4 0.5% 0.6% 0.6% 0.6%

Dow U.S. 29.25 34,551 16.7 10.7 10.0 447% 56% 8% 9.4 7.0 6.8 1.9 1.4 1.3 2.1% 2.1% 3.1% 3.5%

Eastman U.S. 41.92 5,886 13.8 9.1 9.3 223% 53% -3% 5.9 5.2 5.2 3.6 3.1 2.6 2.1% 2.1% 2.3% 2.3%

Methanex U.S. 26.59 2,478 24.2 13.8 8.1 NM 76% 69% 12.7 7.2 5.1 1.9 1.8 1.5 2.3% 2.3% 2.5% 2.5%

E u r o p eYara Norway 271.3 14,392 9.0 7.7 8.4 131% 16% -8% 8.4 5.2 5.8 2.2 1.8 1.5 1.7% 2.0% 2.3% 2.6%

Akzo Nobel Netherlands 39.465 13,076 12.2 12.6 12.1 163% -3% 4% 6.3 6.1 6.0 1.0 1.0 1.0 3.5% 3.4% 3.7% 3.8%

BASF Germany 54.66 71,099 11.0 8.6 9.6 222% 28% -10% 5.3 5.4 5.6 2.3 2.1 1.9 3.1% 4.0% 4.4% 4.5%

A s i aHonam S.Korea 323000 9,328 13.1 8.6 7.6 -2% 52% 13% 9.9 6.2 5.5 2.3 1.8 1.5 0.5% 0.5% 0.6% 0.8%

Sumitomo Japan 306 6,688 34.3 NA NA -125% NA NA 9.7 NA NA 0.9 NA NA 2.9% 2.0% 3.9% 4.0%

Taiwan Fert. Taiwan 80 2,624 45.5 23.2 19.4 36% 96% 20% 66.7 43.5 26.3 1.6 1.5 1.5 1.8% 2.8% 3.1% 3.7%

Formosa Plast. Taiwan 89.3 18,291 12.0 11.3 11.0 65% 7% 2% 14.0 12.5 11.9 2.1 2.1 1.9 4.5% 7.6% 7.5% 7.8%

N a m e C o u n try P r i c e ( L C ) M k tC a p( $ m n )P E R ( x ) E P SG ro w th ( % ) E V /E B IT D A P /B V D iv id e n d Y ie ld ( % )

Source: Bloomberg, SICO Research.

Note: - Based on Bloomberg Consensus Estimates


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Page 14

Petrochemicals Round UpCompany Forward Valuation Charts- PE and PBVSABIC- PER and PBV charts

Jan-05 Sep-05 May-06 Jan-07 Sep-07 May-08 Jan-09 Sep-09 May-10 Jan-11 Sep-11

35x 29x 23x 17x 11x 5x SABIC

Source: Company Data , SICO Research

IQ- PER and PBV charts


28x 24x 20x 16x 12x 8x IQ



12x 10x 8x 6x 4x 2x SABIC


6x 5x 4x 3x 2x 1x IQ


15/18


Page 15

Petrochemicals Round UpSAFCO- PER and PBV charts

an-05 Sep-05 May-06 Jan-07 Sep-07 May-08 Jan-09 Sep-09 May-10 Jan-11 Sep-11

38x 32x 26x 20x 14x 8x SAFCO


SIPCHEM- PER and PBV charts

Nov-06 Jun-07 Jan-08 Aug-08 Mar-09 Oct-09 May-10 Dec-10 Jul-11

28x 24x 20x 16x 12x 8x Sipchem



12x 10x 8x 6x 4x 2x SAFCO

Nov

-06

Jan

-07

Mar-

07

May

-07

Jul-07

Sep

-07

Nov

-07

Jan

-08

Mar-

08

May

-08

Jul-08

Sep

-08

Nov

-08

Jan

-09

Mar-

09

May

-09

Jul-09

Sep

-09

Nov

-09

Jan

-10

Mar-

10

May

-10

Jul-10

Sep

-10

Nov

-10

Jan

-11

Mar-

11

May

-11

Jul-11

Sep

-11

5.0x 4.0x 3.0x 2.0x 1.0x Sipchem


16/18


Page 16

Petrochemicals Round UpMajor GCC Listed Petrochemical Companies- Product Portfolio

IQ Qatar Ethylene, MethanolLDPE, LLDPE, HDPE,

MTBE

Urea,Ammonia,

MelamineDRI, Steel

SIPCHEM Saudi Arabia MethanolAcetic acid, Butanediol,

VAM.- Industrial Gases

SAFCO Saudi Arabia Methanol -Urea,Ammonia,

Melamine

YANSAB Saudi Arabia Ethylene, PropyleneLDPE,HDPE,PP,MEG,

BTX- -

KAYAN Saudi Arabia EthyleneHDPE,LDPE,PP,EO,EG,Ph

enol

RABIGH Saudi Arabia

Ethylene, Propylene,

Benzene,Styrene,

Methanol

EPPE, LLDPE, HDPE, PP,

PO, EG-

Gasoline, Fuel

Oil

APPC Propylene PP - -

MAADEN Saudi Arabia - Ammonia, DAPGold,

Aluminium

TASNEE Saudi Arabia Ethylene, Propylene PP,LDPE, HDPE Titanium Oxide

SAHARA Saudi Arabia Ethylene, Propylene HDPE,LDPE

Acrylic Acid,

Caustic Soda,

EDC

Alujain Saudi Arabia Propylene PP - Pesticides

CHEMANOL Saudi Arabia Methanol -Urea, Melamine,

FormaldehydeIndustrial Gases

Company Country Bas ic PetrochemsOther majordownstreampetrochems Fertilizers

Otherproducts

Source: Zawya, MEED, SICO Research Note - includes major announced expansion projects.


17/18


Page 17

Petrochemicals Round UpGCC Petrochemical Industry - Project Monitor

Saudi

KayanSaudi Arabia Jubail 1,350 550

HDPE,LDPE,PP,EO,EG

,Phenol10,000 4Q11

Sabic (35%), Al

Kayan (20%)

QAFCO Qatar Urea, Ammoina 3,000 1Q12 IQ (75%)QAFCO Qatar Urea 610 4Q12 IQ (75%)

Petrochem Saudi Arabia Jubail 1,100 400 HDPE,LDPE,PP 5,900 2H 2012Petrochem(65%),

Chevron(35%)

TSOC Saudi Arabia Jubail Acrylic Acid 670 1H14 BasellSahara Saudi Arabia Jubail Caustic Soda, EDC 550 2H13 Maaden (50%)

SIPCHEM Saudi Arabia Jubail

Ethylene

acetate/ButylAcetate

110 1H14 Sipchem (100%)

SIPCHEM Saudi Arabia Jubail EVA/LDPE 860 1H14

SIPCHEM (75%),

Hanwha (25%)

SIPCHEM Saudi Arabia Jubail Wire/Cable polymers 60 1H14SIPCHEM (50%),Hanwha (50%)

SABIC Saudi Arabia Jubail

MMA,PMMA,Acrylon

itrile,Polyacrylonitrile,SCN

3,200 2H 2013

Sadara Saudi Arabia Jubail

PUR, LLDPE, PO,MEG, LDPE, Amines,

Elastomers, Glycol

Ethers

20,000 2H15Aramco (50%) &

Dow (50%)

SAFCO Saudi Arabia Jubail Urea 1H14

SAAC /Aafinuc

Saudi Arabia Jubail Polymer 374 3Q13SAAC (75%) Aafinuc

(25%)

C o m p an y C o u n tryE t hy l e neCa pa c i t y( ' 0 0 0 M T )

E x pe c t e d/ onl ine

M a j ors ha r e ho l de r soc a t i on

P r opy l e neCa pa c i t y( ' 0 0 0 M T )

D o w n s t r e a mp r o d u c t s

C o s t( $ m n)

Source: Zawya, MEED, SICO Research


18/18

Documents

Petrochemical Round Up - October 2011[1]