- Spot earnings continue to increase and are 22% below our estimate for FY21 at R6.06/share. The recent increase in oil prices is a key driver of higher earnings. Refining margins were stable but remain well below mid cycle levels. The stronger rand reduces Sasol’s rand denominated debt on translation at the end of the year.
- Polymer prices were flat in Asia in the week, but ethylene prices remain on a declining trend. Ethylene prices were lower (-18%) in the US. LDPE and LLDPE prices were lower and the US integrated margin has declined by almost 8% since the September high.
Global chemical news
- China’s polyethylene demand is tapering off following severl weeks of active buying. Supply into the region is also increasing (link).
- China’s Wanhua Chemical has achieved on-specification ethylene and propylene production at its 1 mn ton propane-fed ethylene cracker in Shandong province. The downstream units include HDPE, LLDPE and ethylene oxide plants (link).