Lotte Chemical Titan Holding Bhd has signed a three-year agreement with Aramco Trading Singapore Pte Ltd to secure a steady supply of naphtha, reinforcing its long-standing relationship with Saudi Aramco’s trading arm. According to a filing with Bursa Malaysia, the deal was inked through Lotte Chemical Titan’s wholly owned subsidiary, Lotte Chemical Titan (M) Sdn Bhd, and will run from July 2025 to June 2028.

Under the terms of the agreement, Lotte Chemical Titan will purchase between 300 kilotonnes (KT) and 400KT of naphtha annually, with pricing based on market rates. Aramco Trading Singapore has served as a key supplier of naphtha feedstock to Lotte Chemical Titan over the years and remains a crucial partner in the company’s supply chain strategy.

The contract is expected to help Lotte Chemical Titan secure critical raw materials needed for the production of olefins and polyolefins, which are used in various industries including packaging, automotive, and construction. The company noted that the contract will not affect its share capital or shareholder structure.

Despite securing this major feedstock supply agreement, Lotte Chemical Titan continues to face financial challenges. The company recently reported its eighth consecutive quarterly loss. For the first quarter ended March 31, 2025 (1QFY2025), it posted a net loss of RM125.67 million. This marks an improvement from the RM178.03 million net loss reported in the same quarter a year earlier.

Revenue, however, fell 22.3% year-on-year to RM1.49 billion, compared to RM1.92 billion previously. The decline was primarily attributed to lower sales volume and reduced average selling prices amid ongoing market volatility. Nonetheless, the narrower loss was credited to improved product spreads, lower depreciation charges, and a positive contribution from the group’s 40%-owned associate, Lotte Chemical USA.

The deal with Aramco Trading Singapore may provide a measure of stability for Lotte Chemical Titan, which has been operating under challenging market conditions characterized by fluctuating feedstock costs, compressed margins, and subdued demand in key markets.

Saudi Aramco, the parent company of Aramco Trading Singapore, is one of the world’s largest integrated energy and chemical companies. Its upstream operations encompass the exploration and production of crude oil, condensates, natural gas, and natural gas liquids. On the downstream side, the company is involved in refining, petrochemicals, base oils and lubricants, as well as retail, distribution, trading, and power generation.

On Friday, shares of Lotte Chemical Titan closed at 54 sen during the midday trading break, down half a sen or 0.9%, giving the group a market capitalization of RM1.25 billion. Year to date, the counter has declined by 15.62%.

The newly signed supply contract marks a continued commitment to strategic partnerships and may support Lotte Chemical Titan’s efforts to navigate industry headwinds while positioning itself for long-term recovery.