- Spot earnings were lower this week and FY22E earnings are at R51.44/share. Oil prices and refining margins were higher but chemical prices lower. We have included Sasol’s recent oil hedges in our spot earnings estimates as well as the sensitivity tables. Our sensitivity tables are also expanded to show a wider currency range.
- Asian chemical prices continue on a downward trend with prices declining for the 10th week running. Asian cracking margins are also retreating from the multi-year high achieved in April. US ethylene prices continue to trend lower, but polyethylene prices are steady.
Global chemical news
- US and Asian polymer prices are diverging as Asian prices decline. US prices are supported by supply shortfalls and logistics constraints are hindering imports of polymers into the US (and exports from Asia). The onset of hurricane season and supply disruptions could see even higher prices (link).
- Disruptions in the supply chain are impacting various chemical markets which could support prices in the US and Europe for longer. Freight rates should also remain high. There is a comprehensive article on supply chain in chemical markets here (link).