Was NPRA Off The Mark On China?



By John Richardson

I HAVE been speaking to my colleagues who attended this week’s NPRA conference in San Antonio, Texas, and it didn’t appear from discussions during the event that a potential slowdown in China was high on anyone’s radar screen. In fact, for many of the delegates it didn’t seem to be blinking on the screen at all.

Evidence on the ground from our contacts in the polyolefins market is that selling activity remains very subdued and has been so since the Chinese New Year (CNY).

Fellow blogger Paul Hodges pointed out earlier this week that new official figures indicated a decline in lending and a slowdown electricity consumption growth in February. Although February numbers are usually heavily distorted by the CNY effect, both of these key economic indicators were a great deal weaker than for the same month in 2010.

As Paul says it is too early to say that the pause in China’s breakneck growth will turn into a significant trend.

But it does feel very strange out there. Maybe the lack of willingness by buyers to commit to big volumes mainly reflects anxiety over an exceptionally uncertain global economic environment rather than lack of credit and inflation in China.

The blog, however, would have thought that delegates at NPRA would have at the very least flagged up this hopefully temporary lull in China as a risk to volumes and earnings growth in 2011. It is always best to under rather than over promise.

Or are we wrong? Please tell us…..



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