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Aramco, SABIC Plan Strategic Organization of Product Sales, Marketing

SABIC announces first-quarter earnings jump and discloses a reorganization of marketing activity with Saud Aramco. (Asharq Al-Awsat)
SABIC announces first-quarter earnings jump and discloses a reorganization of marketing activity with Saud Aramco. (Asharq Al-Awsat)
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Aramco, SABIC Plan Strategic Organization of Product Sales, Marketing

SABIC announces first-quarter earnings jump and discloses a reorganization of marketing activity with Saud Aramco. (Asharq Al-Awsat)
SABIC announces first-quarter earnings jump and discloses a reorganization of marketing activity with Saud Aramco. (Asharq Al-Awsat)

On the same day it announced a plan to realign product sales and marketing with Saudi Aramco, the Saudi Basic Industries Corp (SABIC) reported first-quarter net profit of around SAR 4.8 billion ($1.2 billion).

Meanwhile, the sales and marketing for a number of Aramco petrochemicals and polymers products will move to SABIC, and the offtake and resale responsibility of a number of SABIC products will transfer to Aramco Trading Company (ATC) under a plan revealed on Thursday.

The effect of these changes, planned to be implemented on a phased basis during 2021 will focus SABIC on petrochemicals products and ATC on fuel product, said a joint statement.

“The transfers reflect our shared commitment to capitalize on the complementary nature of Aramco and SABIC’s respective product portfolios as we strive to create added value for our customers and shareholders,” said Ibrahim Al-Buainain, Aramco Trading Company President and CEO.

It represents the latest move to integrate the strategies of both companies following Aramco’s acquisition of a 70% stake in SABIC in June 2020.

Aramco and SABIC will continue to review options for further global marketing and sales transfers across product-producing companies within the Aramco group portfolio, they said.

The changes will drive further operational efficiencies, strengthen the brands of both companies and their combined products and services offering, and help to maintain competitiveness. Customers will benefit from improved product range and availability, ordering and points of sale, supply chain, shipping reliability, and after-market services and solutions.

“By leveraging and optimizing our complementary combined product portfolios we will create a one-stop shop for the benefit of our customers globally, including in strategically important geographies, especially across Asia,” said SABIC Executive Vice President Abdulrahman Al-Fageeh.

“These marketing and sales transfers and operational changes are intended to put us closer to market, driving greater agility and flexibility to deliver added value to customers and power their ambition,” he added.

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Gold Hits One-month High as Prospects for Fed Cuts Rise on Softer US Inflation Data

Gold prices firmed near one-month highs hit earlier on Thursday - File Photo
Gold prices firmed near one-month highs hit earlier on Thursday - File Photo
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Gold Hits One-month High as Prospects for Fed Cuts Rise on Softer US Inflation Data

Gold prices firmed near one-month highs hit earlier on Thursday - File Photo
Gold prices firmed near one-month highs hit earlier on Thursday - File Photo

Gold prices firmed near one-month highs hit earlier on Thursday after a softer-than-expected core US inflation print increased chances of two Federal Reserve rate cuts this year, with the first likely in June.

Spot gold gained 0.3% to $2,704.56 per ounce as of 0934 GMT after hitting its highest level since Dec. 12 earlier in the session. US gold futures gained 0.7% to $2,736.50.

Further gains in safe-haven bullion were, however, limited as Hamas and Israel reached a deal for a ceasefire in Gaza after 15 months of conflict and heightened Middle East tensions, according to Reuters.

Gold rallied to multiple-record highs and is still up nearly 50% since the war began in October 2023.

"Although de-escalating geopolitical tensions can dilute demand for safe havens, bullion is still holding on to most of its post-CPI gains, suggesting that the Fed rate outlook remains the primary driver for gold prices," said Exinity Group chief market analyst Han Tan.

"Gold should find itself in a supportive environment, so long as market participants can hold on to expectations for Fed rate cuts in 2025."

Interest rate futures traders are pricing in near-even odds that the Fed would reduce rates twice by the end of this year, with the first reduction to come in June. Before the inflation data on Wednesday, futures were only pricing a single quarter-point interest-rate cut in 2025.

Core US inflation increased 0.2% in December after rising 0.3% for four straight months.

Central bank officials noted US inflation continues to ease after Wednesday's data, but foresee uncertainty due to anticipated Trump administration policies.

Investors are worried that the potential for tariffs after Donald Trump re-enters the White House next week could stoke inflation and limit the Fed's ability to lower rates to a greater extent.

Non-yielding bullion, a hedge against inflation, loses its appeal with higher interest rates.

Elsewhere, spot silver rose 0.7% to $30.87 per ounce and platinum firmed 0.6% to $944.23, while palladium fell 0.8% to $953.49.