By John Richardson WE STILL DON’T have all the data we need to reach a firm conclusion about whether the recent surge in China’s petrochemical prices (see a few examples above) is founded on genuinely strong demand or just stocking-up by buyers in anticipation of further supply-driven price increases. And even where we do have […]
Asian Chemical Connections
China Commodity SpeculationThreatens Price Correction
By John Richardson A SMOKING gun that points to more market-distorting high levels of speculation in China’s commodity markets? Have “circular trades” have made a comeback, where one commodity is bought merely to speculate in another commodity or even in real estate? Please consider the following evidence: China’s coastal iron ore inventories in early March […]
Don’t Bet On A Post-Lunar New Year Rebound
By John Richardson THERE is a very risky theory that I have picked up in my conversations with Asian polyolefin industry players over the past few days: Strong underlying demand growth in China, low stock levels held by the country’s plastic converters and a stabilisation of oil prices will result in a firm recovery […]
China Copper, Chemicals And The Interconnections
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 […]
China Commodities Rally About Protecting Existing Debt
By John Richardson OVER the last few days we have focused on the increased risk-on trade in commodities, including petrochemicals. But maybe the rallies we have seen in products such as fibre intermediates and polyethylene (PE) are mainly about traders being forced to increase their risk profiles in order to protect existing liquidity. Here is the […]
Please Be Careful Out There
By John Richardson Quite often, a chart is worth many thousands of words. The above chart, from Bloomberg, shows the divergence between the soaring S&P 500 index and US macro-economic indicators. The theory is that soaring equity values will be the tide that lifts all boats. Even America’s hard-pressed middle classes will benefit, not just […]
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