MENA Petrochemicals "2Q26 preview; where do we go from here?" Estefanous

Research evidence excerpt

MENA Petrochemicals "2Q26 preview; where do we go from here?" Estefanous

Global Research

24 July 2026ab

MENA Petrochemicals Equities

Saudi Arabia2Q26 preview; where do we go from here?

Chemicals, Commodity

Alexander Estefanous, CFA

Global Chemicals; the good, the bad and the ugly Analyst

The MENA petrochemicals sector continues to navigate a challenging operating alex.estefanous@ubs.com

environment after more than three years of cyclical weakness, with the recent Middle +44-20-7567 0508

East conflict adding a further layer of complexity/uncertainty and reflecting in risk Jon Peace

premia. While global economic activity remains supportive, evidenced by manufacturing Analyst

PMIs expanding across most major regions and industries, the quarter was characterised jon.peace@ubs.com

by significant cost inflation across feedstocks, energy and logistics. Pricing trends have +44-20-7567 0638

accelerated markedly, with polymers, chemicals and fertilisers seeing strong sequential

price increases across key end markets, driven in part by supply chain disruptions and

heightened geopolitical uncertainty. However, higher realised prices have been

accompanied by rising input costs, while shipping networks across the region have

become increasingly complex and costly. Against this backdrop, investor sentiment

towards the sector remains cautious, with global chemical equities down c.10% YTD on

average and MENA names also under pressure, reflecting ongoing questions around the

sustainability of the recovery, margin pass-through and the potential for further

disruption to regional trade flows.

Borouge (BUY; PT Dh2.65, -5%): Q2 debris damage drives estimate cuts

Borouge’s operating environment remains dominated by the regional conflict, with its