Scenario 2, my preferred scenario, would see China 2023 PE demand at approximately 38.5m tonnes – an average of 2% higher across the three grades than in 2022.
Asian Chemical Connections
China’s options for economic revival in 2022 narrow as HDPE demand outlook worsens
My previous best-case outcome for China’s HDPE demand growth in 2022 was 6%. My worst-case scenario was a 3% decline. Now, though, I worry that the best-case outcome for 2022 HDPE demand could be flat or zero growth. My worst-case outcome is a 4% decline.
China’s “Common prosperity” uncertainties multiply as we head into the unknown
By John Richardson DON’T SAY I didn’t warn you. This article in The Wall Street Journal confirms my warning that Xi Jinping’s “common prosperity” reforms would face resistance from vested interests. China’s president Xi is having to dial back plans for the introduction of widespread property taxes, according to WSJ. “China has experimented with a […]
China Reforms: The Global Implications
By John Richardson IT can feel logical to assume that the fundamentals of the petrochemicals business in Asia haven’t really changed. When you think about it, apart from a brief interruption in the region’s success story during the Asian Financial crisis in 1997-1998, everything has been pretty much plain sailing. And in retrospect, the severity […]
Demographics Threaten China Property Collapse
By John Richardson THE persistent weakness in China’s petrochemicals markets had mainly been caused by problems in the country’s property sector, according to many delegates on the sidelines of last week’s Asia Petrochemical Industry Conference (APIC) in Pattaya, Thailand. Here are some worrying numbers that help to explain this view: China’s real-estate sales declined by […]
Running Away From Complexity
By John Richardson TWO-and-half years ago, the blog was told of a struggling Shanghai shoe-repair shop owner who had mortgaged himself up to the hilt in order to buy three apartments. “He has taken the risk because he assumes that the government will never let property prices fall,” a sales and marketing manager from […]
China To Take A Big Stick To Financial Crisis
By John Richardson CHINA is facing a financial crisis that could put US sub-prime into the shade. “Between 2007 and 2012, the ratio of credit to GDP climbed to more than 190%, an increase of 60 percentage points,” said US funds manager, GMO, in a report. “China’s recent expansion of credit relative to GDP is […]
China Investment Lowest Since 2002
By John Richardson THE chart above indicates the extent to which polyethylene (PE) price rises over the last few weeks have failed to adequately compensate for higher feedstock costs. Last week saw prices edge up by a further $10-40/tonne, according to ICIS pricing. “The majority of buyers have accepted higher September offers, but we know […]
It All Depends On Your Time Frame
By John Richardson HOW long a recovery lasts is always relative to your investment horizons. For example, if you are a day trader in the Dalian Commodity Exchange’s futures contract in linear low-density polyethylene (LLDPE), a rebound might only need to last 24 hours for you to make money. And if you are trading in […]
Forty Five Minutes On China
By John Richardson CHINA’S GDP (gross domestic product) growth could fall to only 6.6 percent this year compared with 9.2 percent in 2011, warned Patrick Chovanec, an economist at the Tsinghua University’s School of Economics and Management in Beijing in this Reuters article. Even this very-low rate of growth for China will only be achieved […]