Saudi Basic Industries Corp. (Sabic), one of the globe’s largest chemical producers, posted a notably weaker first quarter in 2024 as soft demand and higher operating costs squeezed the petrochemical sector. Bloomberg notes the company’s quarterly results to illustrate the drop in profitability.
Sabic reported a net profit of 250 million riyals for the first three months, about 67 million US dollars. This figure fell far short of the consensus among analysts, who had anticipated roughly 556 million riyals in profit. The miss underscores ongoing headwinds for the chemical industry, where sluggish demand pairs with rising costs to compress margins and complicate growth plans across the sector.
The company’s quarterly performance coincided with strategic moves aimed at adjusting exposure to softer markets. Sabic announced the closure of a division in the Netherlands, a decision attributed to unfavorable market conditions and the need to optimize resource allocation in a challenged European environment. In related industry developments, Exxon Mobil signaled some scaling back of its operations in France as it reassesses its European portfolio.
Other major players in the chemicals space reported softer results, including BASF SE and Sinopec, while Dow Chemical expressed cautious optimism that demand would improve over time. These results reflect a broader pattern in which cost pressures, supply chain dynamics, and fluctuating demand continue to shape quarterly earnings and strategic decisions in the sector.
Within the broader energy and chemicals landscape, several U.S. oil majors have pursued production increases amid ongoing volatility and the influence of OPEC+ policy shifts. The balance between supply discipline and demand resilience remains a critical factor guiding investment, capacity expansion, and long-term planning across the industry.
Historically, the sector has undergone shifts in strategic planning and corporate structure, including reorganizations and changes in listings, as key players adapt to a slow but persistent cycle of demand and supply fluctuations. Market participants continue to monitor how these structural adjustments interact with price signals, energy costs, and global trade dynamics as the industry seeks to stabilize margins and cultivate sustainable growth.