• Spot prices still point to heavy losses in FY21 (R27.74/share).  Key drivers remain the low oil price compounded by negative crack spreads.  All chemical prices are lower than our expectations.
  • Oil prices and refining margins increased in the last week, but refining margins remain negative.  Petrol cracks are trading close to Brent crude, but diesel prices are at a discount of almost $2.00/bbl.  While monomer prices have increased, polymer prices continue to fall.  Ethane prices are up significantly as natural gas prices and frac rates moved higher.  US ethane cracking margins are approaching zero.  We also note a large decline in coal prices (Figure 24).
  • We include peer group metrics on in Figure 31 of the note.

Global chemical news

  • Fatty alcohol prices in China increased in recent weeks due to panic buying of personal care, detergent and sanitation products.  This after prices declined significantly since the start of the year (link).
  • US polyethylene export prices firmed early in May amid reports of stronger demand from China.  Several polyethylene producers are however reducing operating rates in2Q and even idling plants as demand slows and production economics deteriorate (link).