- Key prices are moving rapidly lower continuing to drive Sasol’s spot earnings lower. Oil declined by a further 14% and refining margins are down 8.4%, mainly due to petrol cracks falling to around $2.50/bbl. Diesel cracks are holding up at around $12/bbl.
- While the Asian ethylene price declined in the week, polymer prices were generally flat. This while ethane prices in the US declined to 9cpg (-30.6%). US integrated chemical margins expanded as a result (Figure 21).
- We expect polymer prices will to trend lower and follow the naphtha and ethylene prices lower in coming weeks.
- All price indicators for the Performance Chemicals business (PKO, benzene and kerosene) were also significantly lower in the week (Figure 23). PKO prices are almost 36% lower than in January.
- Sasol’s spot earnings continue on a downward trend and we now expect a loss of R3.63/share (before announced cost savings) in FY21 at spot prices.
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