• Spot earnings continue to increase as this week oil prices and refining margins increased while the rand remained relatively flat.  FY21E spot earnings are at R22.15/share (ex reversal of currency losses) with FY22E spot earnings at R39.60/share.
  • LLDPE and Polypropylene prices continued to increase in Asia and monomer prices halted their recent declines.  Polyethylene prices in the USA continue to rocket higher and LDPE increased by $150/t or 10% in the week.  LLDPE prices were $100/t or 8% higher (link).  Ethane prices remain stable despite the disruptions as a result of the cold weather in Texas.  Gas prices have moved above $3/MMBtu.

Global chemical news

  • Contrary to current price movements, Platts paints a sombre picture for petrochemicals in 1HFY21.  Global ethylene demand appears lacklustre and there is ample supply.  US cracker margins are expected to halve by 2Q.  US polyethylene prices and margins are expected to come under pressure as the region seeks to manage excess volumes and compete in foreign markets.  MEG prices are expected to come under further pressure as the US increases production.  PVC appears to be the only tight market (link).