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.

At a time like this, US petrochemical producers could have a price advantage and may increase their supplies; some expect supplies to even China increasing substantially.

“The US over the last five years has added around 10 million tonnes of ethylene capacity primarily to service the export markets --China in particular. Most of that capacity hit the market over the last 18 months -- I would fully expect the US to gain market share of exported product to China at the cost of Saudi Arabia,” said Hassan Ahmed, analyst at US-based investment research firm Alembic Global Advisors.

Ahmed said a $10 a barrel move in oil prices would swing ethylene and polyethylene prices by $121 a tonne and methanol prices by $67/ tonne. As for the two of the key feedstock for the petrochemical industry, he expects a $10 per barrel move in crude oil prices will swing naphtha prices by $93 per tonne, while ethane prices may not react as it tends to move with natgas prices.