More of the cheap stuff?
Source of picture: www.thelocal.de
Some of the China import data for September is now available - showing record-high imports of monoethylene glycol (MEG), ethylene vinyl acetate (EVA), polyacetal, polycarbonate (PC).
"I have given up trying to figure this out. There is not sufficient accurate information anywhere to read a trend. Reality is that they continue to buy to put SOMEWHERE," said a senior polyolefin industry source last week.
"Physical and future markets are continuing to show strength, but export and domestic consumption data continues to be weak."
Now he is beginning to think, like this blog, that a lot of these extraordinary volumes have to do with China making gains in specific finished-goods export markets. A lot more data-crunching is needed to stand this up.
A note of caution and context - a lot of these September imports might have been booked in July/August before the recent price declines.
There could have also been some stock building ahead of the long October holidays (when we get the October figures any dips will also need to take into account the holidays).
If China is making big gains in finished-goods export markets thanks to all of its competitive advantages, you can read the latest US Conference Board confidence index results either way.
The failure of US consumers to respond to better equity and housing markets could indicate a deeper shift in the way Americans spend, said Ian Shepherdson, chief economist at High Frequency Economics - in this FT article on the last Conference index.
More thrift might give the Chinese the ability to cost-cut their way into bigger slices of export markets.
Such a weak level of confidence, though, points to a poor Christmas sales season. This would leave a lot of goods left stacked on US shop shelves, pointing to a big New Year dip in commodity chemical exports to China.
But again - this would have to be put in the context of the Chinese New Year in February!