04 June 2013 22:02 [Source: ICIS news]
By Jeremy Pafford
COLORADO SPRINGS, Colorado (ICIS)--China’s slowing growth rate has companies doing business there concerned about a lack of certainty upon which they can build, three CEOs of chemical producers said on Tuesday.
“Ultimately, that economy is so important to everybody, regardless of whether you’re a US competitor, a European competitor, somebody who is in Asia,” said Jim Gallogly, CEO of Netherlands-based LyondellBasell. “If ?xml:namespace>
Gallogly and fellow company executives
Petrochemical companies are finding a disconnect between the reported data and forecast numbers for
Later in the month, the International Monetary Fund (IMF) cut its forecast GDP growth for
However, Gallogly said growth in
Brondeau echoed those sentiments, saying that
“The fact [is that] China is not growing at the expected rate we would be expecting at this time of year, combined with the fact that on expectation of faster rates, there has capacity buildup in China in 2011-2012, which following a slower couple of years, 2012 and 2013, have been creating overcapacity,” he said.
Brondeau added: “I think I’m pretty anxious to see them getting back to numbers in the 7-8% because it does not feel at all … that we are close to those numbers.”
The Chinese government at the national level has been attempting to cool down its economic expansion after years of double-digit growth, but that is occurring contrary to what provincial governments are seeking at the local level, Brondeau said.
“You have the government which is trying to cool down the industries, the economies. But then you go down to the province level, and the heads of the provinces don’t want to have less employment – they want us to grow employment,” he said. “So they are pushing capacity within their own manufacturing facilities. … So you have those two forces that are fighting each other.”
The provinces are growing at different rates as well, Gallogly said.
“It’s different than it was five years ago,” he said.
Add in the fact that
“It’s just a different set of rules you’re playing by,” he said.
More than anything, chemical producers hope
“A highly predictable, well-organised 5% per year, I would take that – it’s not a bad number. The problem is more the uncertainty in the way we go about it. At 5%, if you build for 8%, then [you get] overcapacity” and pricing issues, he said.
The ACC annual meeting concludes Tuesday in
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