• Rebounding in oil prices, a recovery in refining margins and small increases in chemical prices had a significant impact on Sasol’s spot earnings and we now estimate a loss of R13.12/share for FY21.
  • Ethylene prices in Asia continue to increase on slightly higher naphtha prices and polymer prices have also moved higher.  (link) US polymer prices remain at depressed levels, however.  Rising ethane prices continue to drive US cracking margins lower.

Global chemical news

  • Italy’s proposed €450/t tax on virgin plastics, impacting single use items, which was due to come into effect on 1 July 2020 has been postponed to the 1January 2021 (link).
  • According to the ACC, US chemical production declined by 3.1% in April, the third successive month of declines.  Production fell across all regions and products.  Production on the Gulf Coast declined by 3.3% (MoM) and by 3.9% (YoY) (link) despite increased capacity.
  • Traffic activity in Europe’s five largest economies increased to more than 60% of pre-pandemic levels according to apple data.  German traffic activity recovered to 93% of pre-pandemic levels.  Road transport accounts for about half of oil demand in Europe (link).