Petrochemical companies may see feedstock supply crunch, margin pressure

Mumbai: Indian petrochemical manufacturers may face disruption in the supply of feedstock and margin pressure as prices increase after the disruption in supply from Saudi Aramco which witnessed attacks on its facilities on September 14, sector experts said.

Price of naphtha, a key feedstock, has been volatile since the attacks. Reports suggest that some Asian manufacturers have already paid a premium of about $10 a tonne for it. The supply itself would be a challenge for Asian countries, especially India, which are structurally short of the fuel. Saudi Aramco is the third largest Middle Eastern supplier to the region.