• Spot earnings moved higher again this week as chemical prices rose, and the rand weakened.  Refining margins remain particularly weak and diesel cracks remain negative.  Spot earnings for FY21 are at R6.13/share.  At spot prices the LCCP would lose R1.88/share.  The LCCP remains shut after hurricane Laura.
  • Chemical prices continue to move sharply higher in Asia with the ethylene chain particularly strong.  Polyethylene prices in the US were only slightly higher, however.  North American margins benefited from a sharp drop in ethane prices (-20%).

Global chemical news

  • IHS has published an updated chemical market outlook, suggesting ethylene demand will grow by 1% despite the global economic contraction in 2020.  Significant capacity additions however overshadow demand growth and operating rates are expected to remain subdued until 2025 (link).

Braskem has launched production of polypropylene at a new 450kt facility in Texas.  Polypropylene is Sasol’s largest polymer in its South African business, also suffering from oversupply (link).