By John Richardson FOR the time being at least, the year-on-year growth in China’s polyethylene (PE) net imports (imports minus exports) has fallen. In January-May 2017, net imports were up by no less than 19%. However, the January-June increase is down to 11% to total imports of around 5.2m tonnes, with the reduction in line […]
Asian Chemical Connections
China PP Demand Surprises On The Upside, But Oil Threat Remains
By John Richardson CHINA’S PP market, provided oil prices don’t further collapse, seems to be pretty close to the end of a destocking cycle that stretches back to February of this year, when the post-Lunar New Year traditional surge in new import orders didn’t happen. The reason is a further fall in net imports (imports minus […]
US Govt Policy, Weaker China Indicate Further Oil Price Decline
By John Richardson OIL markets have reached an important tipping point as the bulls and the bears try to exert decisive influence. There is resistance from the bulls which helps to explains why, after last week’s collapse in oil prices, crude bounced back last Friday and on Monday of this week. But the physical realities of the market […]
Tumbling Oil Prices: Implications For Asian Polyethylene
By John Richardson DON’T say that I didn’t warn you. Oil prices now look much more likely to hit my forecast of $35//bbl, or lower, by Q4. Such is the downward momentum right now in crude markets that it is perfectly possible that this price level will be breached well before then. As of Tuesday, […]
China PP Market Underlines Return To Global Deflation
By John Richardson CHINA’S polypropylene (PP) net trade, which is imports minus exports, fell by 31% on a month-on-month basis in April to around 316,000 tonnes. That was to be expected given the 42% surge in net trade in Q1 2017 over the first quarter of last year. But if you look at the period from January […]
Why Oil Prices Could Be At $35/bbl Or Lower By Q4
Saudi Arabia and the rest of OPEC may regret their decison to cut production, as this has led to a resurgence in US shale-oil production – and a further wave of innovation in shale technologies. Combine this with a slowdown in the Chinese economy and oil prices could be at $35/bbl or less by Q4 […]
China’s Lock-Step Moves On Credit, Pollution Threaten Global Economy
China’s renewed efforts to tackle excessive lending and pollution are closely linked as progress on deflating the 2016 credit bubble will also see progress towards cleaning-up the environment. This will lead to quite a sharp slowdown in GDP growth during the rest of this year which China is in a good position to weather because of strong growth in Q1. But globally, […]
China’s Polypropylene Market Reflects Wider Economic Problems
By John Richardson WHEN traders acquired big volumes of polypropylene (PP) cargoes to export to China at the end of last year for arrival in Q1, they were confident that the country’s domestic market would easily absorb just about every single pellet in every single container. Their confidence was based on the recovery in China’s […]
China To Drive Return To Global Deflation
By John Richardson THE Wall Street Journal agrees up with my blog: Two months after I warned that a slowdown in lending growth in China was a major threat to the global economy, its 1 May front-page article echoed my warning. Meanwhile, evidence continues to build that the pace of the credit slowdown is accelerating. First […]
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 […]
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