PREVIEW-Saudi's SABIC 2nd-qtr net profit seen falling 78 pct

* Petchem prices still below Q2/2008

* Effects of U.S. acquisition to weigh

* Safco unit forecast to post 60 pct net profit fall

By Souhail Karam

RIYADH, July 7 (Reuters) - Saudi Basic Industries Corp 2010.SE (SABIC), one of the world's largest petrochemical makers by market value, is expected to post a 78 percent plunge in net profit due to low prices for its products and the lingering effects of a 2007 U.S. acquisition.

The average forecast of four analysts for second-quarter net profit is 1.67 billion riyals ($445.3 million), compared with 7.55 billion riyals in the same quarter last year. [ID:nL2655784]

SABIC, seen as an industry bellwether, rattled the market when it reported a deeper than expected loss in the first quarter, partly because of a writedown on its acquisition of GE Plastic, which it bought for $11.6 billion in 2007 just before the U.S. economic downturn.

Lower petrochemical prices also contributed to the first-quarter loss, which Hesham Abu-Jamee, head of asset management at Bakheet Investment Group, believes will again be a factor in SABIC's second-quarter results.

Abu-Jamee said the price of a basket of SABIC's petrochemical products, which include polyethylene and polypropylene, rose 5 percent from the first quarter, but are still 50 percent lower compared with the second quarter of 2008.

REVENUE GEOGRAPHY CHANGES

The acquisition of GE Plastic would also likely have an effect, partly because it had reshaped the geography of SABIC's revenues, KSB Capital Deputy Chief Executive Ibrahim Al-Alwan said.

"The U.S. market now accounts for a substantial, but not a majority, part of SABIC's revenue. It reduced Asia's share and made SABIC more vulnerable now to changes affecting the U.S. market," he said.

"There is also the problem of volumes (sold) ... There is little positive news out of America," Alwan said.

Petrochemical prices have been affected by sinking demand and the oil price, which has fallen from a record $147 a barrel last July before crashing to $32.40 a barrel in December. Oil has since risen, and was around $65 on Tuesday. [ID:nSP379393]