By John Richardson POLYETHYLENE (PE) industry planners need to factor in the following as they prepare for 2012: 1.) Oil prices are causing demand destruction in the global economy. They could go higher due to the Iranian nuclear crisis. In real dollar terms, as fellow blogger Paul Hodges has written, crude prices were the highest […]
Asian Chemical Connections
Resolving China’s Bad Debts
By John Richardson IS China facing a bad debt crisis as serious, or perhaps even worse, than sub-prime in the US and sovereign debt in Europe? Despite all the bland reassurances the blog keeps hearing from chemical industry executives about the tremendous growth prospects in China, this is a valid question as we try to assess […]
The Planning Process Gets Harder
By John Richardson EARLIER this week we talked about the possibility that China might devalue the Yuan rather than allow it to further appreciate. We have since been told by a senior chemicals industry source that this is exactly what the Chinese government is evaluating in case the worst of possible outcomes occurs – the […]
Yuan Devaluation Needs To Be Considered
By John Richardson The “beggar my neighbour” trade wars that many economists feared would erupt after the global financial crisis were delayed thanks to fiscal stimulus. But now politicians will be under increasing pressure to erect trade barriers. “We are seeing a rise in antidumping cases involving chemicals,” a trade lawyer who specialises in the […]
US Chemicals See End Of Profit Boost
By John Richardson THE extent to which the US economy has become distorted in favour of the corporate sector was thrown into sharp relief by this article in the New York Times (the financial sector is another separate, but equally disturbing story). Whether the US can tackle the longer-term factors behind the distortions in favour […]
China’s Widespread Inventory Problem
By John Richardson THE extent of the inventory overhang in China has become more apparent thanks to a research note from Kunal Agrawal – Singapore-based refining and chemicals analyst with BNP Paribas. Kunal’s note – based on a survey of polyethylene (PE), acrylonitrile butadiene styrene (ABS), polyvinyl chloride (PVC) and butadiene producers and traders – […]
China Downside Continues To Surprise
By John Richardson THE statistics speak for themselves. For example: *The full HSBC August manufacturing index for China, which was released last Friday, showed that manufacturing input costs were rising at their fastest rate for four months, suggesting that the battle against inflation is a long way from being won. Although the final HSBC […]
Limited Help For China’s SMEs
By John Richardson THE credit crisis that is limiting chemicals and polymer trade in China is continuing, even though local initiatives have been launched to help small and medium-sized enterprise (SMEs) with the central government indicating that more help could be on the way. As we have discussed before on the blog, the trade finance crisis […]
China’s Long-term Shift In Inflation
By John Richardson THE odd chemicals trader who has gone long might well seek to talk-up his or her markets by claiming that the slowdown in China’s inflation rate is great news. But nobody interested in anything beyond the sale of the next cargo should read anything too-positive into the decline in consumer inflation in August […]
This Is Not Merely A Rough Patch
By John Richardson IT was interesting to read late last week about how certain chemicals analysts still believe that the big slump in the sector’s share prices might merely be a rough patch, possibly just a correction. In this same excellent piece from my colleague Nigel Davis, Citi US chemicals analyst PJ Jukevar talks about how […]
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