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Sidpec's sales projected as positive due to COVID-19 The company's sales, including high density polyethylene/HDPE, are expected to jump in February and March.
Naeem Research projects that Sidi Kerir Petrochemicals Company's (Sidpec) sales could be impacted positively by the ongoing coronavirus (COVID-19) pandemic. There has been a substantial surge in global demand for high density plastic products needed for producing protective face masks and ventilators. The company's sales, including high density polyethylene/HDPE, are expected to jump in February and March. While utilisation rates are expected to rise above 100% in the first quarter (1Q) of FY2019/20, due to the surge in export volume growth, global petrochemical prices continue to remain weak. HDPE, in particular, is still trading at a five year low, below $1,000/tonne. Naeem's advice for Sidpec stocks remains a BUY, with the company's earnings performance expected to have improved sequentially in 1Q of 2019/20 on volume growth. There is also an anticipated drop in feedstock costs, starting in March 2020. Petrochemicals have seen a marginal increase in demand in the local market, as China's product dumping came to an end. Export markets, however, are in shambles thanks to the COVID-19 led slump in demand.
