By John Richardson IT is the interconnections that matter and the trouble is that few people seem to have adequately thought about the interconnections between the various dysfunctional parts of the Chinese economy. For example; A lot of the main players in copper financing are also involved in the property market, according to this FT […]
Asian Chemical Connections
China Housing No Longer A One-Way Bet
By John Richardson CHINA’s real estate sector was responsible for 16% of the country’s GDP growth, 33% of fixed asset investment, 20% of outstanding loans, 26% of new loans, and contributed 39% to government revenues in 2013, according to Nomura. And so the potential downside to chemicals demand from a correction in the property sector […]
China’s Urbanisation Myth Bites The Dust
By John Richardson THE blog would again be in the position of being able to afford a yacht in Monte Carlo if it had a dollar, even in an Australian dollar these days, for every time it has heard the phrase “urbanisation will underpin long-term growth in China”. But just as some of the other […]
China And The “Conflation” Problem
By John Richardson WHEN all you care about is making money on the next chemicals cargo, or on a recovery in financial markets, then the current “will they, won’t they?” question over whether China will launch a new round of economic stimulus makes every bit of sense. The debate grew more intense on Monday after […]
Take Away The China “Froth” And What’s Left?
By John Richardson THE denial that we discussed last week is still very much in evidence. For example, we heard the argument over the last few days that China’s economic slowdown would involve only “a couple of bad quarters” and then China, and Asia-Pacific markets in general, would be back to normal. The following two […]
Nothing “Disappointing” About China Data
By John Richardson CHINA’S credit growth in 2014 would have to be higher than that of last year if GDP growth is going to hit 7.5%. But in February, as Reuters wrote in this article: “China’s total social financing, a broad measure of credit in the economy, increased by 938.7 billion Yuan ($US152.9bn) in February, […]
ICIS Launches Asia PP Price Forecasting
By John Richardson PERHAPS nobody should have been that surprised that China’s polypropylene (PP) market was weak in February and the first half of March. Here is why: · China saw its highest-ever monthly level of PP homo-polymer imports in January 2014 – 448, 000 tonnes, according to the New York-based trade data service, International […]
China’s Changing Polyethylene Demand
By John Richardson ONCE people in the developing world start buying food wrapped in plastic packaging, they rarely switch back to food wrapped in paper, executives in the polyolefins industry keep telling us. They thus talk about a “base load” of permanent new demand as urbanisation increases across Asia, which is often accompanied by higher […]
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’s “Irrelevant” Target
By John Richardson WHEN is a target for GDP growth almost irrelevant? Perhaps this year in China, when if history is any guide, even if China genuinely hits its 7.5% growth target, chemicals demand growth could considerably undershoot this number. See the above chart for polyethylene (PE), and here is the explanation: In 2009, when China’s […]
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