By John Richardson LET’S START with the good news first. ICIS Data and Analytics had expected China’s demand for paraxylene (PX) to grow by in 2018 at 5.6% over 2017, but instead I estimate growth at 9.2%. This was awesome news for the world’s major PX producers as the reason for the strong growth was […]
Asian Chemical Connections
China Shadow Lending Down By 70% With Deleveraging To Continue
By John Richardson The ABOVE CHART shows that lending via China’s shadow banking system fell by no less than 70% in January-February 2018 over the same period last year. This follows the 90% year-on-year fall in January 2018. The latest data underline the key conclusion that lending via the highly speculative shadow lending system is […]
Evidence Builds Of China Slowdown As Economic Reforms Gather Pace
By John Richardson THE CHINESE economy remains one of the most overlooked threats to the conventional opinion that we are in the midst of a synchronised global economic recovery. Sure, some alarm bells rang with last week’s release of China’s official Purchasing Managers’ Index (PMI). The official PMI saw its steepest fall in six years. […]
China Shadow Banking Squeeze Threatens Global Economy
By John Richardson THE trend that I identified last August is continuing. China is in the midst of a major contraction in lending via its highly unregulated, and so very risky, shadow banking system. Last year we saw a big fall in shadow lending, but now it has totally collapsed. In January, shadow lending was […]
Oil Prices Over The Next Six Months: What You Need To Know
By John Richardson SURPRISED by the latest decline in crude prices following the US Energy Administration’s (EIA) report that more oil went in to storage last week than in any other week in 34 years? You really shouldn’t be if you have taken note of another extraordinary data set from the EIA that shows the […]
China Has No Reason To Increase Credit
By John Richardson A FEW hours ago, the blog was so distressed when we read the argument that a 13-month low for consumer-price inflation in February gave China justification to ease lending conditions that we spluttered coffee on to the hotel sofa where we were sitting. Sure, China might indeed “blink” again, which remains the […]
China: One “Blink” And We Are Back To Normal
By John Richardson Temporary factors might be behind the weakness in China’s polyethylene (PE) market that has been highlighted by our colleagues at ICIS pricing. Last week, pricing in China was either flat or declined on bearish sentiment (see the above chart). One temporary factor could be the traditional post-Lunar New Years shortage of workers […]
China Targets Trade Finance
By John Richardson AT the high inflation point of any financial bubble, you tend to get outlandishly dangerous and dodgy practices designed to make even more money because most people think that “this time will be different” – i.e. that the drunken party will go on forever. The US sub-prime disaster is, of course, a […]
China And The Fed: Still Back To Front
By John Richardson THEY are still getting it the wrong way round. Both the Financial Times and The Economist, have said over the last few days that weaker prospects for emerging markets are mainly the result of Fed tapering. We continue to think that this might be partly because of the great “unknown, unknown” that […]
China’s Debt Crisis Comes To A Head
By John Richardson HOW much longer will China’s central government continue to kick the can down the road? The answer to this question might well turn out to be the biggest single determinant of chemicals and polymers demand growth over the next few years. When the great rebalancing really kicks in, the wind could be […]
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