- Oil prices and refining margins moved higher this week. Spot earnings for FY21 were however lower following our earnings adjustment on FY20 closing rates. We now expect lower mark to market hedge losses in FY20 but lower gains in FY21 (link).
- Chemical prices were higher however and Asian ethylene prices continue its upward march and polyethylene prices have also started to move higher. US prices for ethylene LLDPE and HDPE were also slightly higher in the last week.
Global chemical news
- China’s state-controlled Sinopec is reorienting its 180,000 b/d Anqing refinery towards petrochemical production. This is in line with new strategies globally to shift refining production to produce more chemicals than fuels (link).
- Low feedstock costs have incentivised producers in Asia-Pacific to maximise polymers production despite weaker demand in this year’s second quarter. Import tariff exemptions saw increased polyethylene exports from the USA to China (link).