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Asian Chemical Connections

PE margins turn negative as economic risks build

By John Richardson CASH margins for Asian linear-low density polyethylene (LLDPE) for naphtha-based producers have turned negative for the first time since Q1 2015, according to an industry contact. And this is of course before the flood of new US LLDPE production arrives in Asia. No matter how you crunch the numbers, the likely increase […]

China’s New Stimulus Package: What It Means For Chemicals

By John Richardson CHINA’S petrochemicals markets are likely to enjoy a confidence rally as a result of yesterday’s announcement of a mini economic stimulus package. The details of the stimulus package include: More railway construction.  The State Council released plans on Wednesday to sell $24 billion US of bonds this year to build railways in […]

The Hedgehog And The Fox

By John Richardson Are there more hedgehogs in the chemicals industry than foxes? This thought came to the blog after meetings with industry executives this week during its latest visit to Singapore. Bear with us and we will, we promise, as quickly as possible get to the point. The philosopher Isaiah Berlin, in his famous […]

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 […]

Polyolefins And Euro 2012

  By John Richardson ASIAN polyolefin traders have little else to do apart from betting on the Euro 2012 soccer championships because of dismal demand, said a Singapore-based trader. “This is the worst I can remember in 10 years in this business, and it is definitely now worse than in 2008,” he added . “The […]

An All Mighty Dalian Muddle

By John Richardson UNDERSTANDING the Dalian Commodity Exchange’s futures contract in RMB-priced linear low-density polyethylene ((LLDPE) requires an understanding of what the traders are up to at any particular point in time, as this is almost entirely a speculators’ market. So, what happened late last year is very illuminating. The chart below shows a sharp spike […]

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