• 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.

Download