By John Richardson CHINA WILL do what suits China and not what suits the rest of the petrochemicals and polymers word. And what suits China has radically changed because of the new US approach to international relations. No longer can China depend on the US, or indeed any other country, for the petrochemicals imports it […]
Asian Chemical Connections
China’s paraxylene imports in 2019-2025 face major downside risks
By John Richardson NEVER underestimate China’s ability to execute vast and highly complex manufacturing projects very efficiently. There is of course a very good chance that my downside scenario will be wrong. It may be technically unfeasible for China to operate its new paraxylene (PX) capacity at 82% in 2019-2025, as opposed to what could […]
China benzene spreads at ten-year low on misplaced trade deal hopes
By John Richardson THE ABOVE chart shows that in April the average spread between CFR Japan naphtha feedstock costs and CFR Northeast Asia (NEA) benzene prices was just $19/tonne, its lowest level since January 2009 during the Global Economic Crisis. AS with Doctor Copper, benzene is a major raw materials building block for many manufacturing […]
Longer trade war: Impact in numbers on China polymers demand
By John Richardson WE MUST now start to quantify the impact on the petrochemicals industry of no end to the US/China trade war during 2019. Economists at Barclays estimate that a 25% US tariff on $200bn of exports could cut Chinese growth by half a percentage point over 12 months, and as much again if […]
Plastics pollution crisis: Impact on polyethylene margins in 2022-2027
By John Richardson ALMOST all countries late last week signed a UN deal to monitor the flow of hard-to-recycle plastics to poorer countries. The US was amongst the few countries which declined to sign the agreement. The deal is the result of the increase in contaminated plastic waste exports to Indonesia, Malaysia and Vietnam etc. […]
China holds all the petchems demand aces as it digs in for longer trade war
By John Richardson THE STRENGTH of China’s position in the intensifying trade war is further underlined by the above chart. In everything from oil and gas through to petrochemicals and finished goods, China is the world’s biggest market. Minus off China from consumption and many other developing countries, and even entire regions, can sometimes almost […]
President Trump’s Tweets increase risk of no trade deal until 2021
By John Richardson THE PROSPECTS of a trade deal seem to have have faded into the distance as a result of Tweeted threats from President Trump that the US will raise tariffs to 25% from 10% on $200bn worth of Chinese imports, including several chemicals and plastics. The increase would happen on Friday, he said. […]
Pressure on US builds as PE exports to China tumble and EU considers tariffs
By John Richardson DONALD TRUMP insisted in early March that he was willing to walk away from a bad trade deal with China. But it now appears that the US is prepared to water down its demands in the interests of getting a deal done. The above chart helps to explain why. The first bar […]
China 2019 PE demand grows in double digits as PP struggles
By John Richardson CHINA’S polyethylene (PE) and polypropylene (PP) markets continue to tell us something very important about the broader economy. In PE, Q1 net import and production data when annualised for the full-year 2019 implies demand growth of 11% over last year. This would be even higher than in 2018, when consumption compared with […]
No room for cynicism as China targets major plastic clean-up
By John Richardson THE CYNICS out there would have you believe that the global plastics rubbish crisis is a passing fad, something that will fade from public consciousness as another “trendy cause” captures the popular imagination. They also want you think that the concern over plastic rubbish is almost entirely a rich world luxury. When […]