• As FY21 draws to a close we have rolled forward our spot earnings estimates by a year (link).  We estimate spot earnings for FY22 at R57.30, flat on spot earnings last week.  Oil prices were higher, but this was offset by the stronger rand.  Refining margins were lower as petrol cracks declined.
  • Around 23% of the upside in spot earnings in FY22 arise from chemical prices.  Monomer prices were flat in Asia, but polymer prices were lower by 2-4% with the largest decline in polypropylene.  US ethylene prices declined by 23% while polyethylene prices remained flat.

Global chemical news

  • GS Caltex is targeting trial runs for its new 500kt HDPE plant in May 2021.  A 700kt cracker is set to start around mid-2021.  This is another af many capacity additions in the C2 value chain (link).
  • Most polyethylene producers in the US are still in force majeure following the Arctic storm in February with limited allocations to contract buyers.  Markets remained strong with a renewed surge in demand and prices are firming, recouping earlier losses (link)