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Saudi state-owned petrochemicals giant SABIC saw its profits shrink by about 4.5% in the third quarter compared with the same period last year. However, SABIC and its Saudi peers are far more insulated from the impact of falling oil prices than some of their foreign competitors, thanks to the rock bottom feedstock costs the Saudi firms continue to enjoy.
SABIC CEO Muhammad al-Mady says that lower oil prices are not here to stay. Global population growth will result in higher consumption levels and support higher prices over the long term, according to Mr Mady, who pinned lower profit levels on weak third quarter sales. Despite the fact that it enjoys very low feedstock costs, SABIC is exposed to some degree of oil price risk: prices of many finished petrochemicals products are linked to oil.
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