14 September 2012 14:32 [Source: ICIS news]
By John Richardson
PERTH (ICIS)--THE Federal Reserve’s decision to launch quantitative easing 3 (QE3), a series of open-ended steps more radical than anything it has attempted before, is bound to drive Asian petrochemical pricing higher, in response to the surging cost of crude.
But as a corporate planner with a ?xml:namespace>
Although most polyolefin buyers in
A sales and marketing executive with a North American polyolefins producer added: "The issue today is that the majority supplier of polyolefins to
"The Asian naphtha-based producers are seeing great cost pressures in
"But this is offering limited help as long sailing times mean that Asian producers are not viewed as preferred suppliers.
"I am not sure if 2013 will be any different."
The key issue for the Asian petrochemicals industry is whether the Fed move on Thursday, and last week’s decision by the European Central Bank (ECB) to buy bonds, will eventually benefit real economies, rather than merely the traders in financial and commodity markets who have made the right bets.
For developing countries such as
For example, a Bloomberg survey, published on 30 August, estimated that US consumers were spending 2.8% of their daily incomes on gasoline. In
Rising fuel and food prices could already be hindering
Food inflation accelerated for the first time in five months, rising 3.4% from a year earlier.
Consumer prices increased 0.6% from the previous month, the biggest increase since January, while food prices increased 1.5% from July.
Monetary easing has already produced positive results. In August, new local currency lending rose to yuan (CNY) 703.9bn ($111bn), way ahead of July's CNY540.1bn.
But as the analyst pointed out: “The August inflation numbers complicate the picture.
Renewed inflationary expectations could, therefore, both restrict
Despite the unexpectedly large rising in August bank lending, business confidence remains low, supporting the notion that
"Any optimism (over the August bank lending) should be tempered by the fact that borrowing by firms, as opposed to households, remains weak," said Mark Williams and Qinwei Wang of Capital Economics, in a research note, quoted in the 12 September issue of The Irish Times.
"The further we dig into the data, the more sceptical we become that they are particularly encouraging. It is hard to see how the economy can be turned around unless firms decide to invest. There is not yet much sign of that happening on a large scale."
But some economists argue that while inflation might be a renewed problem for
Manufacturing oversupply, resulting from weak global demand and the huge economic stimulus package of 2008-2010, could be another factor – along with rising consumer-price inflation – in restricting further stimulus efforts.
Glenn Maguire of the Sydney-based economics consultancy, Asia Sentry Advisor, says in a video on his company’s website that the People's Bank of China has of late been reluctant to further reduce interest rates and bank-reserve requirements. This is because average industry operating rates in
Ever since late 2008, when the global financial crisis began, central banks and governments have experimented with numerous policy initiatives in the hope of achieving sustainable recoveries.
Experimentation is likely to continue into next year and beyond, making effective analysis of government policy crucial for the global chemicals and polymer industries.
($1 = €0.77) ($1 = CNY6.33)
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