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Archive | March, 2007

Is ExxonMobil taking a gamble?

By on 30 March, 2007 in Aromatics, China, Olefins, Polyolefins, Projects

Will China relax the price controls that have led to wallopping great losses for domestic refiners, thereby justifying ExxonMobil’s Fujian investment? As we can see from this Bloomberg article, Exxon is pinning many of its hopes on these controls being relaxed. Does the US giant know something we don’t or are they taking a punt? [...]

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Oops a daisy, here we go again

By on 29 March, 2007 in Aromatics, Business, China, Economics, India, Middle East, Olefins, Polyolefins, Projects

A boring topic to harp on about again I know, but this article from my colleague Nigel Davis from the Insight section of ICIS news supports what I have been saying for the past two years. The industry has overbuilt, and despite all the optimism engendered by project delays and probably cancellations in Iran of [...]

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What’s the point in building a plant if you’ve got nobody to run it?

By on 28 March, 2007 in Aromatics, Business, China, Economics, Environment, India, Olefins, Polyolefins

No point obviously. As this report from Deutsche Bank Download file notes, the global skills shortage is not just in the west. In the engineering sector, and perhaps this applies to petrochemicals, Deutsche Bank claims that the huge outpouring of Indian and Chinese graduates is grossly exaggerated; and it adds that the quality of graduates [...]

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Oh my goodness, when will it end?

By on 21 March, 2007 in Business, China, India, Middle East, Polyolefins

We heard about this rumour last year, but it’s emerged again – Reliance is now said to be in advanced discussions for acquiring Nova Chemicals. Nova’s Alberta-based cracker and PE production might be attractive because of pretty competitive, locked-in gas prices, but would Reliance really want its styrenics business – the asset that’s officially on [...]

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Could Pride Come Before A Fall?

By on 18 March, 2007 in Business, Fibre Intermediates, India, Olefins, Polyolefins

This article from Reuters highlights the danger of overpaying for assets in the current India M&A frenzy.Perhaps its point about the overall of over-confidence is valid, especially given that previous deals were small scale. Other Indian companies, following Tata Steel’s lead, are starting to bid the big league. Integrating small acquisitions to add value is [...]

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The case for investing in Indonesia

By on 15 March, 2007 in Business, Economics, Indonesia, Malaysia, Olefins, Polyolefins, Projects

Indonesia before 1997 had three cracker projects and huge demand growth. It was mentioned in the same breath as China. And, of course, then came the crisis. But this year GDP growth could be the highest since the crisis with the government in sound financial condition. The case for petrochemical investment is obvious as monomers [...]

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Could drug dealers be rehabilitated into the petchem industry?

By on 12 March, 2007 in Business, Economics, Environment

An interesting question, and one that Def Poet Tommy Buttons, the rap artist with a difference (he has a brain) might want to address. Click on this highly amusing link and listen to how he compares the life of a drugs dealer with that of a Nasdeq trader. Substitute Nasdeq trader for a petrochemicals trader [...]

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The flawed art of supply & demand forecasting

By on 7 March, 2007 in Business, Economics, Markets, Projects

A guest blog – see Vanishing Post Boxes on this great blog by the authors of the book Freakonomics put me in mind of all those demand and supply forecasts that are invariably wrong. Yes, I know I’ve written about this ad nauseum – see my last article on this subject.But surely, there has to [...]

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China facing permanent demand destruction?

By on 6 March, 2007 in China, Environment, Polyolefins

An interesting debate is emerging over the growth of the recycled polymer market in China. Sinodata, the Beijing-based consultancy, estimates that 5.8m tonnes of all types of recycled polymers were imported into China last year, an 800,000 tonnes increase over 2006. Five years ago, recycled imports totalled less than 500,000 tonnes. With domestic recycling also [...]

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I told you so – Reliance firms up Jamnagar cracker

By on 4 March, 2007 in India, Olefins, Projects

I had a feeling in my bones that Reliance was laying the groundwork for a major project announcement with its endlessly bullish forecasts about the Indian market (see my earlier blog ‘Is India about to crash?’). And low and behold, last week we saw the Indian major firm up its long-rumoured plans for a new [...]

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