Oil & Petrochemicals Monthly Report - Feb 2022

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Oil & Petrochemicals

Monthly Report - Feb 2022

+966 11 2256248

j.aljabran@aljaziracapital.com.sa

Head of Sell-Side Research Jassim Al-Jubran

2022

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and acetic acid fell in February; Aramco increased propane and butane prices for March sharply

• Naphtha prices jumped, propane and butane rose: Prices of naphtha increased 13.0% M/M to USD 910 per ton in February. Propane and butane prices rose 4.7% and 9.2%, respectively, to USD 775 per ton each.

Aramco raised propane and butane prices for March to USD 895 per ton and USD 920 per ton, respectively, the highest levels since 2014.

• Basic and end products prices gained, intermediates were directionless: Ethylene and propylene prices rose sharply by 22.1% M/M and 16.3% M/M to USD 1,190 per ton and USD 1,210 per ton, respectively.

The increase was driven by a jump in crude oil and naphtha prices, owing to supply concerns due to the Russia-Ukraine conflict. Urea prices declined 12.5% M/M to USD 560 per ton in February due to lower demand. MTBE- Asia prices rose 11.5% to USD 1,020, as demand from gasoline blending remained firmed during February. Acetic acid prices fell 14.6% to USD 675 per ton, ascribed to slower demand recovery and inventory build-up.

• Manufacturing activity in the US and China improved, slowed in Eurozone: US ISM Manufacturing PMI increased to 58.6 in February from 57.6 in January, driven by growth in new orders and production. China’s Caixin manufacturing PMI rose to 50.4 from 49.1 in the previous month, as new orders recorded the fastest growth in eight months and demand recovered. Eurozone manufacturing PMI fell 58.2 in February versus 58.7 in January.

Supply concerns pushed oil prices up in February fueled by the Russian invasion of Ukraine; prices crossed USD 100/bbl mark in early March

• Crude oil moved up, reaching a new multiyear high: Oil prices rose in the first two weeks of February due to supply concerns amid surging geopolitical tension between Russia and Ukraine. The prices dropped in the third week on the prospects of higher Iranian oil exports, thus easing ongoing supply concerns to some extent. Oil prices increased significantly in the last week of the month as Russia attacked Ukraine, launching a special military operation. This was followed by sanctions on Russia by the US and major European countries, thus raising concerns over tighter supply.

Brent prices increased 8.8% M/M, while WTI increased 5.5% M/M in February, ending at USD 97.9/bbl and USD 91.6/bbl, respectively. The Brent-WTI spread almost doubled to USD 6.3/bbl in February from USD 3.2/bbl in January. Natural gas prices at Henry Hub fell 3.6% M/M to USD 4.5/mn Btu.

• Oil trading above USD 100/bbl in early March: In early March, oil prices continued to move upward due to supply concerns amid sanctions imposed by western countries on Russia over invasion in Ukraine. The prices breached USD 100/bbl level, reaching the highest level in more than seven years.

Name Price (USD

per ton) M/M % Q/Q % Y/Y % YTD %

Naphtha 910 13.0% 26.4% 51.7% 28.2%

Saudi Propane 775 4.7% -10.9% 28.1% -2.5%

Butane-Saudi 775 9.2% -6.6% 32.5% 3.3%

Ethylene 1,190 22.1% 11.2% 16.7% 19.6%

Propylene-Asia 1,210 16.3% 22.2% 8.5% 25.4%

HDPE 1,280 9.4% 10.3% 12.3% 12.3%

LDPE 1,600 6.0% 6.7% 3.6% 11.1%

LLDPE 1,280 8.5% 9.4% 9.4% 11.3%

PP-Asia 1,175 1.7% 0.9% -3.3% 6.3%

Styrene-Asia 1,240 2.9% 21.0% -7.8% 12.2%

Polystyrene-Asia 1,450 6.6% 2.1% 3.6% 7.4%

PET - Asia 1,150 3.6% 0.9% 16.2% 10.6%

PVC-Asia 1,300 3.2% -10.3% 4.0% -2.3%

MEG (Asia) 650 -7.8% -3.0% -21.7% 2.4%

Methanol-China 365 0.0% 10.6% 19.7% 17.7%

DAP-Gulf 895 0.0% 16.2% 115.7% 0.6%

Urea-Gulf 560 -12.5% -42.0% 53.4% -35.3%

Ammonia-Gulf 845 0.6% 16.6% 181.7% -0.6%

MTBE-Asia 1,020 11.5% 29.9% 48.9% 25.9%

EDC 835 -5.6% -16.1% 39.2% -9.7%

MEG (SABIC) 940 0.0% 1.1% 17.5% 1.1%

PC 2,965 3.1% -1.2% 3.1% 10.8%

Acetic Acid-AA 675 -14.6% -34.1% -10.6% -22.0%

EVA 2,380 0.0% -24.3% 17.5% -1.7%

Vinyl Acetate

Monomer-VAM 2,050 5.4% -18.0% 61.4% -15.5%

Note: Prices as of February 27, 2022

Source: Argaam, Reuters Eikon, AlJazira Capital Research

Table 2: Economic Calendar

Date Country Event

March

02,09,16,23,30 US Weekly Petroleum Status Report

8-Mar US Trade Balance

8-Mar EIA Short-term Energy Outlook 10-Mar US Initial Jobless Claims

11-Mar US Monthly Budget Statement

14-Mar KSA CPI YoY

15-Mar OPEC Monthly Oil Market Report 16-Mar KSA GDP Constant Prices YoY 16-Mar IEA Oil Market Report 28-Mar KSA M3 Money Supply YoY 28-Mar KSA SAMA Net Foreign Assets SAR 29-Mar KSA Current Account Balance 30-Mar US GDP Annualized QoQ

1-Apr US Unemployment Rate

5-Apr KSA IHS Markit Saudi Arabia PMI

Source: Bloomberg, IEA, EIA, OPEC

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Key comments from international energy agencies

Crude oil supply Global supply

• Global oil supply rose 560,000 bpd to 98.7 mbpd in January.

The supply is expected to increase by 6.3 mbpd in FY22, as per IEA, provided that OPEC+ completely rolls back its cuts during the year.

• Global supplies of crude oil and liquid fuels are expected to rise by 5.9 mbpd to 101.4 mbpd in FY22 and by 2.1 mbpd to 103.5 mbpd in FY23, as per EIA. Non-OPEC supply is forecast to grow 3.3 mbpd to 67.2 mbpd in FY22 and 1.7 mbpd to 68.9 mbpd in FY23.

• Global refining throughputs are forecasted to increase by 3.8 mbpd in FY22, as per IEA. The runs are expected to underperform demand during most of FY22.

OPEC Supply

• OPEC crude oil production rose 0.1 mbpd M/M in January to average at 28.0 mbpd, as per OPEC’s secondary sources.

• On average, OPEC members produced 27.7 mbpd of crude oil in Q4-21 compared to 26.8 mbpd in Q3-21, as per EIA. The agency forecasts OPEC crude oil production to increase to 28.2 mbpd in Q1-22.

• OPEC’s average crude production is estimated at 28.6 mbpd in FY22 and 29.0 mbpd in FY23, according to EIA.

• OPEC’s unplanned oil supply disruptions averaged 2.08 mbpd in January (versus the average of 2.02 for December), as per EIA.

mbpd

80 90 100 110

Jan-15 Oct-15 Aug-16 Jun-17 Mar-18 Jan-19 Nov-19 Sep-20 Jun-21 Apr-22 Feb-23 Dec-23

Figure 1: World Oil Production

Source: OPEC, AlJazira Capital Research

Table 3: OPEC Monthly Oil Production

Prod. (‘000bpd) Cap. Nov Dec Jan Feb % M/M Chg.

Equatorial Guinea 120 90 120 110 100 -9.1%

Gabon 220 190 190 180 180 0.0%

Republic of Congo 300 290 280 270 260 -3.7%

Venezuela 670 630 650 670 620 -7.5%

Algeria 1,060 950 960 970 980 1.0%

Libya 1,200 1,130 1,060 920 1,120 21.7%

Angola 1,200 1,110 1,150 1,120 1,170 4.5%

Nigeria 1,600 1,530 1,420 1,520 1,540 1.3%

Iran 3,830 2,520 2,510 2,520 2,550 1.2%

Kuwait 2,715 2,530 2,550 2,580 2,620 1.6%

U.A.E. 4,200 2,870 2,890 2,910 2,960 1.7%

Iraq 4,800 4,280 4,280 4,310 4,280 -0.7%

Saudi Arabia 11,500 9,880 10,030 10,060 10,170 1.1%

Total OPEC 33,415 28,000 28,090 28,140 28,550 1.5%

Source: Bloomberg

Figure 2: OPEC February Oil Production

('000 bpd)

0 2,000 4,000 6,000 8,000 10,000 12,000 Equatorial Guinea

Gabon Republic of Congo Venezuela Algeria Libya Angola Nigeria Iran Kuwait U.A.E.

Iraq Saudi Arabia

Source: Bloomberg

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Table 4: World Oil Demand and Supply

(mbpd) FY21 FY22E FY21 FY22E FY23E

World Crude Oil & Liq. Fuels Supply Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4

OPEC Supp. 30.24 30.75 32.15 33.07 33.75 33.96 34.40 34.53 31.56 34.16 34.53 Non-OPEC Suppl. 62.23 63.78 64.31 65.26 65.84 67.13 67.84 68.06 63.91 67.23 68.94 Total World Supply 92.47 94.53 96.46 98.33 99.59 101.09 102.24 102.60 95.47 101.39 103.47 World Crude Oil & Liq. Fuels Cons.

OECD Cons. 42.30 43.98 45.68 46.01 45.82 45.45 46.33 46.62 44.51 46.06 46.40 Non-OECD Cons. 51.79 52.21 52.52 53.69 53.88 54.60 54.77 54.94 52.56 54.55 56.08 Total World Cons. 94.09 96.19 98.20 99.70 99.70 100.04 101.10 101.56 97.07 100.61 102.48 OECD Comm. Inventory (mn barrels) 2,911 2,868 2,749 2,682 2,688 2,769 2,812 2,828 2,682 2,828 2,972 OPEC Surplus Crude Oil Prod. Cap. 2.49 2.12 2.15 2.03 n/a n/a n/a n/a 2.20 n/a n/a

Source: EIA STEO February 2022, AlJazira Capital Research

• The gap between crude consumption and supply is estimated to contract to 0.11 mbpd in Q1-22 (higher consumption than supply) from 1.37 mbpd in Q4-21 (higher consumption than supply).

• OECD’s crude inventories are expected to be at 2.69bn barrels in Q1-22, higher than 2.68bn in Q4-21.

Global

• As per OPEC, global consumption increased by 5.7 mbpd Y/Y in FY21 to the average of 96.6 mbpd and is expected to rise 4.2 mbpd to 100.8 mbpd in FY22. IEA estimates global oil demand to increase by 3.2 mbpd to 100.6 mbpd in FY22. As per EIA, global consumption of petroleum and liquid fuels is forecasted to average at 100.6 mbpd in FY22 (+3.5 mbpd Y/Y), and the global consumption is expected to increase further by 1.9 mbpd Y/Y in FY23.

• Global demand for petroleum and liquid fuels stood at 99.03 mbpd in January, indicating a rise of 6.6 mbpd Y/Y, as per EIA.

OPEC

• OPEC’s crude demand averaged 27.9 mbpd in FY21, an increase of 5.0 mbpd Y/Y (0.1 mbpd higher than the previous estimate).

• OPEC demand for FY22 is estimated to grow 1.0 mbpd Y/Y to 28.9 mbpd (0.1 mbpd higher than the previous estimate).

Inventory

• OECD industry stock fell 60.0 mb to 2,680 mb in December; initial data for January showed that industry stocks decreased by 13.5 mb, according to IEA.

• EIA forecasts OECD inventories to stand at 2.83bn barrels by end- FY22 and 2.97bn by end-FY23.

• Natural gas inventories in the US stood at 2.3tn cu. ft. as of January 2022, falling below the five-year average, according to EIA. Natural gas inventories are forecasted to decrease to 1.6tn cu. ft. by March 2022.

Price outlook

• Brent spot prices averaged at USD 87 per barrel in January, as per EIA. Brent prices are forecasted to average at USD 83 per barrel in FY22 (USD 8 per barrel higher than the previous month’s forecast) and USD 68 per barrel in FY23.

• Goldman Sachs raised its one-month oil price forecast to USD 115 per barrel from USD 95 per barrel, owing to the Russia-Ukraine conflict. The firm earlier forecasted Brent oil price to average at USD 96 per barrel in FY22 and USD 105 per barrel in FY23.

• EIA expects natural gas prices at Henry Hub to average at USD 3.92/mn Btu in FY22 and at USD 3.60/mn Btu in FY23.

Figure 3: OECD Monthly Oil Inventories

Source: US EIA, AlJazira Capital Research

mbpd

2,500 2,700 2,900 3,100

Jan-14 Oct-14 Jul-15 Apr-16 Jan-17 Oct-17 Aug-18 May-19 Feb-20 Nov-20 Aug-21 May-22 Mar-23 Dec-23

3,300

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Petrochemical sector news

• Rabigh Refining and Petrochemical Co.’s (Petro Rabigh) board of directors revised its recommendation to decrease the company’s capital by 8.01% from 13.76%. The board did not amend its recommendation in relation to capital increase by way of a rights issue.

(Source: Argaam)

• Saudi Aramco and an international investor consortium, led by affiliates of BlackRock and Hassana, announced today the successful closing of the lease and leaseback deal previously announced on December 06, 2021. The consortium has acquired a 49% stake in Aramco Gas Pipelines Company, a subsidiary of Aramco, for USD 15.5bn (SAR 58.1bn). (Source: Argaam)

• Methanex Corp., the world’s largest producer, and supplier of Methanol, kept its Asian contract price for March unchanged at USD 480 per ton, compared to the previous month. (Source: Argaam)

• CMA approved the request from Advanced Petrochemical Co. to increase its capital from SAR 2.2bn to SAR 2.6bn. The capital will be increased by issuing one bonus share for every five existing shares. The increase will be paid by transferring SAR 261.2mn from the statutory reserve account and transferring SAR 174.1mn from the retained earnings account. Consequently, the company’s outstanding shares will increase from 216.5mn to 260.0mn. (Source: Argaam)

• Nama Chemicals Co.’s board of directors decided to appoint Faiz Al Ahmari as Chairman and Abdullah Al Subiyal as Vice Chairman.

(Source: Argaam)

• Sahara International Petrochemical Co. (Sipchem) announced the scheduled periodic turnaround maintenance of plants of its affiliates, Al Waha Petrochemical Co. and Sahara & Ma’aden Petrochemical Co. This scheduled turnaround maintenance started on February 14 will run for four weeks. (Source: Argaam)

• Methanol Chemicals Co. (Chemanol) signed a non-binding MoU with Global Company For Downstream Industries (GDI) to explore cooperation opportunities between the two companies. Under the MoU, Chemanol will supply Methanol to GDI, where the two parties will also explore opportunities for future collaboration in the field of petrochemical products.

• Chemanol’s board of directors decided to withdraw its capital hike file due to the noticeable improvement in the company’s financial position and the recent positive changes in the global markets. (Source: Argaam)

• Sipchem announced achieving synergy targets of the merger with Sahara Petrochemicals Co. ahead of scheduled June 2022 by realizing SAR 298.0mn in FY21. Sipchem indicated that this was a remarkable achievement relative to other historical business combinations globally in the chemicals and petrochemicals industry. (Source: Argaam)

Table 5: KSA Petrochemical Companies Key Metrics

Company Net profit

(TTM; SAR mn) P/E P/B EV/ EBITDA DPS (SAR) Dividend yield YTD returns

SABIC 23,033.7 16.8x 2.2x 8.1x 4.0 3.1% 11.2%

TASNEE 845.3 17.4x 1.9x High - - 15.6%

YANSAB 1,531.3 25.5x 2.6x 11.7x 3.0 4.3% 1.6%

SABIC Agri-Nutrients 5,228.9 15.4x 5.2x 11.7x 4.3 2.5% -3.2%

Sipchem 3,591.8 10.3x 2.4x 8.0x 2.3 4.7% 15.0%

Advanced 815.4 20.5x 4.5x 14.2x 2.6 3.4% 9.9%

KAYAN 2,393.9 13.1x 1.9x 7.2x - - 22.7%

Petrochem 1,366.8 16.2x 2.4x 8.9x 0.8 1.6% 19.8%

SIIG 1,136.3 14.1x 2.2x 8.2x 1.0 2.9% 11.9%

Nama Chemicals -0.3 NA 2.9x 24.7x - - 20.0%

Chemanol 244.0 21.6x 2.9x 10.1x - - 10.6%

Source: Bloomberg, Argaam, Aljazira Capital Research

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Brent WTI ORB

-40 20 80 140

Jan-16 Jul-16 Feb-17 Aug-17 Mar-18 Sep-18 Apr-19 Oct-19 May-20 Nov-20 Jun-21 Jan-22

1.5

5.6

1.0 2.0 3.0 4.0 5.0 6.0

Jun-17 Sep-17 Jan-18 Apr-18 Aug-18 Nov-18 Mar-19 Jun-19 Oct-19 Jan-20 May-20 Sep-20 Dec-20 Apr-21 Jul-21 Nov-21 Feb-22

Figure 7: Oil Price Trends (USD per Barrel) Figure 8: Henry Hub Natural Gas (USD per MMBTu)

Source: OPEC, AlJazira Capital Research Source: Reuters Eikon, AlJazira Capital Research

Figure 6: US Weekly Natural Gas Storage Figure 5: US Weekly Oil Inventories

Source: US EIA, AlJazira Capital Research Source: US EIA, AlJazira Capital Research

mn bbls

541

300 400 500 600

Jan-14 Nov-14 Oct-15 Sep-16 Aug-17 Jul-18 May-19 Apr-20 Mar-21 Feb-22

1,000 2,000 3,000 4,000 5,000

Jan-17 Aug-17 Apr-18 Dec-18 Jul-19 Mar-20 Oct-20 Jun-21 Feb-22

• US weekly oil inventories rose 1.1% W/W to 416.0mn barrels for the week ended February 18. On M/M basis, inventories remained largely flat.

US oil production averaged 11.67 mbpd in February 2022.

Production rose 0.3% M/M from 11.64 mbpd in January while increased 19.4% Y/Y from 9.77 mbpd in February 2021.

In the week ended February 25, the rotary rig count in the US stood at 650 (up 5 W/W). The average number of rigs rose 5.8% M/M in February vis-à-vis a rise of 3.7% in January.

The average rig count was up 60.1% Y/Y in February. As of February 25, of the total 650 rigs, 422 (up 2 W/W) were used to drill for oil and 127 (up 3 W/W) for natural gas. In the US, oil exploration surged 68.9% Y/Y, while gas exploration increased 38.0% Y/Y.

• US weekly natural gas storage decreased 6.8% W/W to 1,782 bcf in the week ended February 18. On M/M basis, natural gas storage fell 31.2%.

Figure 4: US Oil Production versus Rig Count

Source: US EIA, AlJazira Capital Research

Rig count US oil production (RHS)

8 10 12 14

200 800 1,400 2,000

Jan-14 Aug-14 Apr-15 Nov-15 Jul-16 Feb-17 Sep-17 May-18 Dec-18 Aug-19 Mar-20 Nov-20 Jun-21 Feb-22

Price Trend: Oil, Natural Gas & Petrochemicals Products

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550

100 150 200 300 400 500 600

Jan-14 Jul-14 Jan-15 Aug-15 Feb-16 Sep-16 Mar-17 Oct-17 Apr-18 Nov-18 May-19 Dec-19 Jun-20 Jan-21 Jul-21 Feb-22

VAM PC

0 1,500 3,000 4,500

Jan-14 Jul-14 Feb-15 Aug-15 Mar-16 Sep-16 Mar-17 Oct-17 Apr-18 Nov-18 May-19 Dec-19 Jun-20 Jan-21 Jul-21 Feb-22

Figure 15: Methanol-China (USD per Ton) Figure 16: PC-VAM

Source: Argaam, AlJazira Capital Research Source: Argaam, AlJazira Capital Research

Polypropylene

PP-Asia Polystyrene-Asia 1,560

650 695 1,150 1,650 2,150

Ammonia-Gulf Urea-Gulf DAP-Gulf 150

860

- 200 400 600 800 1,000

Figure 13: Polypropylene & Polystyrene Figure 14: Ammonia, Urea & DAP

Naphtha Propane -Saudi Butane-Saudi 150

400 650 900 1,150

Jan-14 Oct-14 Aug-15 Jun-16 Mar-17 Jan-18 Nov-18 Sep-19 Jun-20 Apr-21 Feb-22

LDPE

HDPE LDPE LLDPE

500 900 1,300 1,700 2,100

Jan-14 Feb-15 Apr-16 Jun-17 Aug-18 Oct-19 Dec-20 Feb-22

Ethylene Propylene-Asia Styrene-Asia 300

700 1,100 1,500 1,900

Jan-14 Jul-14 Feb-15 Aug-15 Mar-16 Sep-16 Mar-17 Oct-17 Apr-18 Nov-18 May-19 Dec-19 Jun-20 Jan-21 Jul-21 Feb-22

MEG-Asia

MEG (Asia) VAM MTBE

0 800 1,600 2,400 3,200

Jan-14 Oct-14 Aug-15 Jun-16 Mar-17 Jan-18 Nov-18 Aug-19 Jun-20 Apr-21 Feb-22

Figure 9: Feedstock Price Trends (USD per Ton)

Figure 11: Polyethylene Price Trends (USD per Ton)

Figure 10: Basic Petchem Price Trends (USD per Ton)

Figure 12: Intermediates Price Trends (USD per Ton)

Source: Argaam, AlJazira Capital Research

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830

0 200 400 600 800 1,000

Jan-14 Jul-14 Jan-15 Jul-15 Jan-16 Jul-16 Jan-17 Jul-17 Jan-18 Jul-18 Jan-19 Jul-19 Jan-20 Aug-20 Feb-21 Aug-21 Feb-22

225

250 450 650 850 1,050

Jan-14 Jul-14 Feb-15 Sep-15 Apr-16 Nov-16 Jun-17 Jan-18 Aug-18 Mar-19 Oct-19 May-20 Dec-20 Jul-21 Feb-22

295 880

150 180 350 550 750 950

Jan-14 Aug-14 Apr-15 Nov-15 Jul-16 Feb-17 Sep-17 May-18 Dec-18 Aug-19 Mar-20 Nov-20 Jun-21 Feb-22

800

350 500 650 800 950

880

395

Figure 17: Naphtha- HDPE

Figure 19: Propane (Saudi)- PP

Figure 18: Naphtha- PP

Figure 20: EDC- PVC

• In February, naphtha prices averaged at USD 854 per ton, up from USD 771 per ton in January.

• Polypropylene average prices rose to USD 1,170 per ton in February from 1,107 per ton in January.

• The HDPE-naphtha spread decreased to USD 376 per ton in February against USD 377 per ton in January.

• The PP-naphtha spread contracted to USD 316 per ton from USD 336 per ton during the previous month.

• The PP-propane spread expanded to USD 395 per ton in February from USD 367 per ton in January.

• The PVC-EDC spread rose to USD 500 per ton in February from USD 486 per ton in January.

• The polystyrene-benzene spread expanded to USD 383 per ton in February from USD 356 per ton in January.

• The HDPE-ethylene spread plunged to USD 99 per ton in February compared to USD 199 per ton in January

• PP-butane spread was down to USD 395 per ton in February from USD 397 per ton in January.

• LDPE-naphtha spread increased 2.0% M/M to USD 699 per ton, while LDPE-ethylene fell 16.9% to USD 421 per ton in February.

• LLDPE-naphtha spread fell 0.6% M/M to USD 379 per ton, while LLDPE-ethylene spread dropped to USD 101 per ton in February from USD 203 per ton in January.

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Table 6: Petrochemical Products by Saudi Petrochemical Companies

Company Finished Products

SABIC Polyethylene, polypropylene, polystyrene, ethylene glycol (MEG), methyl tert-butyl ether (MTBE), benzene, urea, ammonia, PVC, and PTA

SABIC Agri- Nutrients Urea, ammonia

YANSAB Polyethylene, polypropylene, MEG, MTBE, and benzene Tasnee Polyethylene, polypropylene, and propylene (TiO2)

Saudi Kayan Polyethylene, polypropylene, MEG, polycarbonate, and bisphenol A

Petro Rabigh Polyethylene, polypropylene, propylene oxide, and refined petroleum products Petrochem Polyethylene, polypropylene, and polystyrene

Sahara Petrochemicals (Sipchem) Polyethylene, polypropylene, Methanol, butanol, acetic acid, and vinyl acetate monomer Saudi Group Styrene, benzene, cyclohexene, and propylene

Advanced Polypropylene

Alujain Polypropylene

CHEMANOL Formaldehyde – improvers concrete

NAMA Epoxy resin, hydrochloric acid, liquid caustic soda, and soda granule

MAADEN Ammonia and DAP

Source: Argaam Plus

900

250 290 450 650 850 1,050

Jan-14 Jul-14 Feb-15 Sep-15 Apr-16 Nov-16 Jun-17 Jan-18 Aug-18 Mar-19 Oct-19 May-20 Dec-20 Jul-21 Feb-22 ^-195^-200

-100 0 100 200 300 400

Jan-14 Jul-14 Feb-15 Sep-15 Apr-16 Nov-16 Jun-17 Jan-18 Aug-18 Mar-19 Oct-19 May-20 Dec-20 Jul-21 Feb-22

380

Figure 21: Benzene- Polystyrene Figure 22: Ethylene- HDPE

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3. Neutral: The rating implies that the stock is trading in the proximate range of its 12 months price target. Stocks rated “Neutral” is expected to stagnate within +/- 10% range from the current price levels over next twelve months.

4. Suspension of rating or rating on hold (SR/RH): This basically implies suspension of a rating pending further analysis of a material change in the fundamentals of the company.

The purpose of producing this report is to present a general view on the company/economic sector/economic subject under research, and not to recommend a buy/sell/hold for any security or any other assets. Based on that, this report does not take into consideration the specific financial position of every investor and/or his/her risk appetite in relation to investing in the security or any other assets, and hence, may not be suitable for all clients depending on their financial position and their ability and willingness to undertake risks. It is advised that every potential investor seek professional advice from several sources concerning investment decision and should study the impact of such decisions on his/her financial/legal/tax position and other concerns before getting into such investments or liquidate them partially or fully. The market of stocks, bonds, macroeconomic or microeconomic variables are of a volatile nature and could witness sudden changes without any prior warning, therefore, the investor in securities or other assets might face some unexpected risks and fluctuations. All the information, views and expectations and fair values or target prices contained in this report have been compiled or arrived at by Al- Jazira Capital from sources believed to be reliable, but Al-Jazira Capital has not independently verified the contents obtained from these sources and such information may be condensed or incomplete. Accordingly, no representation or warranty, express or implied, is made as to, and no reliance should be placed on the fairness, accuracy, completeness or correctness of the information and opinions contained in this report. Al-Jazira Capital shall not be liable for any loss as that may arise from the use of this report or its contents or otherwise arising in connection therewith. The past performance of any investment is not an indicator of future performance. Any financial projections, fair value estimates or price targets and statements regarding future prospects contained in this document may not be realized. The value of the security or any other assets or the return from them might increase or decrease. Any change in currency rates may have a positive or negative impact on the value/return on the stock or securities mentioned in the report. The investor might get an amount less than the amount invested in some cases. Some stocks or securities maybe, by nature, of low volume/trades or may become like that unexpectedly in special circumstances and this might increase the risk on the investor. Some fees might be levied on some investments in securities. This report has been written by professional employees in Al-Jazira Capital, and they undertake that neither them, nor their wives or children hold positions directly in any listed shares or securities contained in this report during the time of publication of this report, however, The authors and/or their wives/children of this document may own securities in funds open to the public that invest in the securities mentioned in this document as part of a diversified portfolio over which they have no discretion. This report has been produced independently and separately by the Research Division at Al-Jazira Capital and no party (in-house or outside) who might have interest whether direct or indirect have seen the contents of this report before its publishing, except for those whom corporate positions allow them to do so, and/or third-party persons/institutions who signed a non-disclosure agreement with Al-Jazira Capital. Funds managed by Al-Jazira Capital and its subsidiaries for third parties may own the securities that are the subject of this document. Al-Jazira Capital or its subsidiaries may own securities in one or more of the aforementioned companies, and/or indirectly through funds managed by third parties. The Investment Banking division of Al-Jazira Capital maybe in the process of soliciting or executing fee earning mandates for companies that is either the subject of this document or is mentioned in this document. One or more of Al-Jazira Capital board members or executive managers could be also a board member or member of the executive management at the company or companies mentioned in this report, or their associated companies. No part of this report may be reproduced whether inside or outside the Kingdom of Saudi Arabia without the written permission of Al-Jazira Capital. Persons who receive this report should make themselves aware, of and adhere to, any such restrictions. By accepting this report, the recipient agrees to be bound by the foregoing limitations.

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