China’s National People’s Congress Source of picture: Rex Features By John Richardson The focus of next week’s National People’s Congress (NPC) meeting in China – the country’s annual “parliamentary” meeting – is likely to be on the quality rather than the quantity of growth. This is reflected in the fact that almost half of […]
Asian Chemical Connections
Damage Limitation
By John Richardson POLYETHYLENE (PE) prices crept up by $10-50/tonne for the week ending 22 February, according to ICIS pricing. But, as the above chart shows, integrated high-density PE variable cost margins in Southeast and Northeast Asia remained very weak, and were way below all the other regions – again, up until the week ending […]
China’s Numbers Game
By John Richardson YET more problems with Chinese economic statistics have emerged, casting doubt over the idea that an economic hard landing was avoided in 2012 – and that there was a strong rebound in the fourth quarter. “Official data on China’s gross domestic product show the slowdown in growth in the last two years […]
HSBC: China 2013 Polyethylene Market Has Peaked
By John Richardson A NEW report from HSBC backs up our concerns that the post-Chinese New Year polyethylene (PE) will be weaker than in December-January. The bank is with us in thinking that the stronger markets over the last two months have been driven by: *Lagging indicators such as strong export and import data and […]
Consensus Confidence For 2013
By John Richardson THE consensus view is that Chinese growth will be fine at the very least for the first half of this year, and possibly for the whole of 2013, thanks to all the money still sloshing around the economy. An additional $19.1bn of infrastructure spending, which was announced by Beijing earlier this week, is a […]
China’s PE Cycle Repeats Itself
By John Richardson THE above chart shows that China’s polyethylene (PE) demand growth has been well below that of overall GDP for most of the years between 2006 and 2012. This supports the argument that economic growth has been too heavily focused on investment rather than consumption, given that the majority of PE goes into […]
China Jan PMIs Tell Different Stories
Source of picture: Imaginechina/Rex Feature By John Richardson ONE can interpret last week’s release of January purchasing manager’s indices for January just about any way you like. Thus, Reuters wrote on 2 February: “China’s official PMI released by the government’s statistics bureau showed factories grew slower-than-expected in January, with a reading of 50.4, easing […]
China: The Politics Behind The “Recovery”
By John Richardson THE overall HSBC flash purchasing managers’ index for January, which was released yesterday, was at a two-year high (see the above chart), with the sub-index of production at a 22-month high. This is great news for equity values and commodity prices, including petrochemicals. We might well see a rally in petrochemicals prices at […]
China’s Shadow Banking Problem
By John Richardson IN the best of all possible worlds, more than a billion people in the emerging markets will become a great deal richer over the next few decades. As a result, they will be able to much more easily afford all of the things made from, or containing, chemicals and polymers – such […]
“Good News” Over China Bank Lending
By John Richardson CHINA’S new local currency lending rose to 703.9 billion Yuan ($111 billion) last month, way ahead of July’s 540.1 billion Yuan. If a you are trader in the Dalian Commodity Exchange’s futures contract in linear-low density (LLDPE) you can take this ostensibly encouraging number, and premier Wen Jiabao’s speech earlier this week about […]
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