- Oil prices and refining margins were higher this week, driving Sasol’s spot earnings higher and FY21 spot earnings (R4.38) turned positive for the first time since the 20th of March.
- LDPE and polypropylene prices increased in Asia this week and US polyethylene prices also increased slightly. US ethylene prices were 6% higher while ethane prices were 3% higher supporting cracking margins in the USA.
- We show our expectations for Sasol’s net debt and net debt: EBITDA ratio at June 2021 below if spot prices prevailed until then.
Global chemical news
- ICIS reports that the supply of both mid-cut and C16-18 alcohols remains tight amid delayed shipments of Q2 alcohols stemming from transport logistic and other coronavirus-related constraints in southeast Asia and Europe during the quarter. This should support prices in Sasol’s Performance Chemicals Unit (link)
- Challenging conditions for ethylene producers should persist in 2020, as new capacity and poor demand forces rationalisation of assets (link).