(Reuters) – Integrated energy and chemicals firm Sasol Ltd said on Friday it expects market volatility to persist into its fourth quarter due to slower global economic growth and infrastructure challenges in South Africa.
In its third quarter production update, Sasol, the world’s biggest producer of fuels and chemicals from coal and gas, reported a 6% decline in total sales volumes compared to the same period last year.
This was due to lower output across most of Sasol’s business units which span coal mining, gas, synthetic fuels production and chemicals with operations in South Africa, Mozambique, Eurasia and the United States.
“Further pricing and demand volatility is expected for the remainder of FY23 in light of the global macro-economic environment and the potential for ongoing disruption from Eskom and Transnet on our suppliers and customers in South Africa,” Sasol said.
South Africa is experiencing extended electricity cuts due to frequent breakdowns of state-owned utility Eskom’s old coal-fired power generation plants. Transnet, another state enterprise, is failing to provide adequate rail services to industry because of the shortage of locomotives and spares as well as vandalism of its infrastructure.
Sasol expects production for the full year to June 2023 to remain within target across its business units, with the exception of its South African fuel refinery business, which was affected by lower hydrogen and steam availability in the third quarter.
(Reporting by Nelson Banya; Editing by Susan Fenton)
