By John Richardson
CHINA'S polyethylene (PE) market, along with probably most of the rest of petrochemicals, continues to disappoint as the above chart illustrates. Overall demand in 2012 (red column) was up by just 1 percent in January-August 2012 compared with the same period in 2010.
One, or perhaps a combination of both of the following factors, as fellow-blogger Paul Hodges pointed out yesterday, explains why PE growth is so much below the expansion in overall GDP:
*The official GDP numbers greatly underestimate the extent of the slowdown.
Inventories continue to clog-up up the system from resins all the way down to finished goods after the great speculative binge of 2008-2010.
Meanwhile, in a further indication of economic weakness, the official Chinese manufacturing purchasing managers' index came at 49.8 for September, missing economists' expectations of a recovery to 50.1 from 49.2 in August.