By John Richardson IF YOU THINK that forecasting the direction of China’s petrochemicals demand has become complicated enough because of Common Prosperity, the new complexities around demand pale into insignificance compared with the tangle of fresh variables shaping local capacity growth. The above slide is just my back-of-the-envelope attempt to chart some of […]
Asian Chemical Connections
China Lending Bubble Adds 4.7m Tonnes To Polyethylene Consumption
By John Richardson THE IMF produced a very interesting study earlier this month, in which it estimated that if it had not been for China’s giant economic stimulus programme the country’s real GDP growth would have averaged only 5.3% per annum during the five years to 2016. Instead, however, the IMF estimates that China’s economy […]
China-led Global Downturn Could Again Happen In September
By John Richardson WHEN the Americans and the Europeans come back from their summer holidays in September it seems quite possible that they will see history repeat itself. It was of course from September 2014 onwards that commodities prices started to decline from their all-time record highs, largely because of a belated understand that credit […]
Global Deflation At Risk Of Returning On End Of China Commodities Bubble
By John Richardson THIS time last year it was deflation that seemed to be the problem for the global economy. Despite many years of US Federal Reserve, European Central Bank (ECB) and Bank of England (BOE) etc. economic stimulus, consumer and producer prices had stubbornly refused to respond in the way that most of the […]
Bricklaying In Australia And Oil Prices: Important Similarities
By John Richardson THE bricklayer came around to my house three years ago, quickly surveyed the extent of the job, drew a sharp breath, and said, “It’s going to cost you at least Aus$4,000.” And that was after a four-week wait to get a quote. How times have changed. Last week, the same bricklayer popped around […]
Expect More Volatility, Uncertainty As China Reforms Continue
By John Richardson MOST Asian stock markets took a hammering on Wednesday because of the sharp decline in Chinese equities. So did commodity markets, as my colleague Nigel Davis pointed out in this Insight article when he wrote: Copper prices hit new 2015 lows, iron ore futures were down sharply. Plastics futures prices plunged on […]
Rudderless Australia Drifts On
By John Richardson THERE used to be two certainties in life that everyone in Australia could depend on. We all know that the first certainty was, and sadly still is, death. But the second certainty was China acting as the “bankroller” of the Australian economy. This has all but vanished since late 2013. The second […]
China Peak Steel And Chemicals Demand May Have Arrived
By John Richardson EVERYONE involved in the iron ore business must be very worried about the recent speech by the new chairman of the China Iron & Steel Association. “Under the ‘new normal’ China’s iron and steel consumption has already entered into the peak zone,” he told his audience. China’s steel consumption will peak at […]
Too Late For Iron Ore, But Not For Petrochemicals
By John Richardson YOU might be familiar with the phrase “putting all your eggs in one basket”. It is the kind of phrase that you learn at your mother’s knee, and yet CEOS seem to have forgotten what they were surely taught from a very early age. The chart below should take your breath away. It […]
Broad Commodities Sell-Off Threatens Petrochemicals
By John Richardson IRON ore prices are now down by nearly 40% so far this year to a level not seen since September 2009. As for crude oil, Brent has now dipped below $100 per barrel, for the first time in over a year. WTI is trading around $92 per barrel, a 16-month low (see the […]