• Spot earnings remain flat as higher oil price and refining margins are offset by lower chemical prices.  FY22 spot earnings are at R52.30/share.
  • Around 12% of the upside to spot earnings in FY22 arise from higher chemical prices. Chemical prices in Asia declined across the board and polymer prices declined for the fifth week running.  LDPE prices are 16% lower than prices achieved at the in March.  US ethylene prices increased slightly but polyethylene prices remained steady.  Integrated polyethylene margins remain at multi year highs despite higher ethane prices, now at 27cpg.

Global chemical news

  • Olefin production losses should peak in south east Asia in 3Q due to cracker maintenance.  This should tighten supplies and support prices in the region (link).
  • Dow Chemical expects to beat consensus estimates for 2Q EBITDA by $400-$500mn.  The company expects demand to remain strong with tight inventory levels, noting strong polyethylene demand (link).