By John Richardson
EUROPEAN olefins markets have turned decidedly bearish, according to my ICIS colleague, Nel Weddle.
"Although the lack of pre-buying in February ahead of a much talked-about increase for March contract prices had been deemed a bearish signal, the one positive was that, up until now, demand levels were fairly stable," wrote Nel, European ethylene editor for ICIS pricing, in her 15 March report.
"However, this seems to have changed this week amid further bearish news from Asia.
"Many market sources are disappointed about the turn of events. Lengthening [European] supply during what is supposed to be the seasonal high for demand, in spite of all the unplanned and planned cracker outages, is not what the market had expected."
Not what the market expected seems to be a pretty common theme. An important question to ask is: Which market - the real one or the virtual reality one?
"Chinese economic recovery has not rebounded as fast as expected post the Lunar New Year and the managements of the companies attending our conference were somewhat surprised that the new Chinese political leadership has not taken more aggressive steps to stimulate the economy," said US chemicals analyst Don Carson. He was referring to the Susquehanna International Group's 2013 Chemicals Conference in Boston, Massachusetts, on 14-15 March.
A challenge for chemicals company executives, if they have fallen into the trap of overselling prospects for growth in Europe and China, is how they explain to shareholders disappointing first quarter financial results.