• At spot prices Sasol’s losses deepen and we now estimate the company will earn a large loss in 2H20 with a full year loss of R5.84/share.  The loss in FY21 increases to R36.99/share.  Large losses on currency, ethane and oil hedges contribute to the loss in 2H20.
  • Refining margins remain particularly weak and diesel cracks have also turned negative.  Ethylene prices continue to fall but polyethylene prices have moved higher.  Ethane prices are on the rise and the forward curve has moved into a steep contango.

Global chemical news

  • A recent report from IHS suggests that the decline in North American polyethylene and polypropylene exports might not be as severe as estimated earlier (link).
  • Exxon started construction of a $10bn petrochemical project in China.  The complex consists of a 1.6mn ton ethylene facility and is one of the few large petrochemical projects in China that is wholly owned by a foreign investor (link).