Sales and Exports

Global market activity in 2019 showed different indicators in terms of the irregular pace of growth and was affected by continued instability in the balance of supply and demand.

In addition, there was intense competition in the availability of materials for export with producers, and the decline in the profit margin, which cast a shadow on some countries, such as; China, whose economy witnessed a relatively slow growth due to the general decline in commodity prices.

On top of this, a decrease in the prices of crops, as well as a delay in the agricultural season, due to delayed rains led to a decrease in demand. Other contributing factors for this were the increase in the quantity of urea available for export in China, declining domestic demand, and devaluing of the currency. All of these factors significantly affected fertiliser prices in general and Urea prices in particular.

However, Indian tenders were one of the main drivers of Urea demand, which compensated for less demand in parts of Australia and Southeast Asia in the third quarter.

The petrochemical sector, is directly related to energy sources (oil and gas), due to the dependence of the petrochemical products on those resources for the production process and its direct impact on operating rates and their reflection on the level of petrochemical prices in global markets. It should be noted here that the prices of petrochemical materials, such as; Methanol, are not affected by variables in energy prices only, but are also affected by other factors, including the balance of supply and demand and the prices of other energy sources.

China and the Far East are the most significant importers of Methanol, as it is used as feedstock for many manufacturing industries such as olefins, formaldehyde and acetic acid, etc. However, the low level of demand in these markets has significant impact on the international prices of Methanol, specifically in China.

Stop production of (MTO) plants which use Methanol as raw material led to an increase in the quantity of Methanol supplied in the market, in addition to increasing global production, with new capacities in America and other countries. These factors led to the low international prices of Methanol.

GPIC managed to successfully overcome all these challenges and achieved the goals set in the work plan during 2019, through the ongoing commitment and support of its employers. This was represented by fullfilling its obligations and achieving all goals set by the Board of Directors with all their wisdom and vision and for all variables in this industry regionally and globally.

GPIC’s sales of Ammonia, Urea, and Methanol totaled 1,231,170 metric tonnes, which represents an increase of 3.6 per cent against what was planned in 2019. A total of 43,599 metric tons of Ammonia and 459,165 metric tons of Methanol were sold, representing an increase of 4.5 per cent against what planned in 2019.

A total of 728,407 metric tonnes of Urea were sold, which was an increase of 6.5 per cent against what was planned for 2019. The company’s export of all three products were loaded to their final destination on board of 62 ships. This is in addition to 791 metric tonnes bagged urea supplied to the local market in Bahrain.

India acquired the largest share of the company’s total exports at 31 per cent and this market represents a major strategic importance for all producers. This was followed by Taiwan with 17 per cent and Thailand with 11 per cent.

The company’s total worldwide exports of Ammonia was 6.7 million metric tonnes, while its total exports of methanol reached 14.2 million metric tonnes since the start of production in 1985. The total Urea exports reached 13.6 million metric tonnes since the operation of the urea plant began in 1998. The three products combined were more than 34.5 million metric tonnes at the end of 2019.

Despite all the challenges faced by the company in 2019, this did not hamper its production and export operations through which the established goals related to export and sales plans were achieved. This indicates the integrity of marketing plans and flexible strategies developed by the Board of Directors, in addition to the efforts of the marketers – the Petrochemical Industries Company (PIC) of Kuwait for Ammonia and Urea Fertiliser and the Saudi Basic Industries Corporation (SABIC), for Methanol.

16%

3%

6%

75%