By John Richardson TAKE a look at the above chart and ask yourself this question, “Why is it that the spreads between high-density polyethylene (HDPE) injection grade and naphtha have been so good so far this year?” The same has therefore, of course, applied to margins for integrated PE producers. Let’s first of all look […]
Asian Chemical Connections
Oil Prices: Why We Are Where We Are Today
By John Richardson TWO months ago, when I was delivering a training course, people responded with deep scepticism when I suggested that oil-price stability at around $65 a barrel wouldn’t be sustained during the second half of the year. And when I suggested the price would soon fall to below $50 a barrel, the […]
China And Commodities Prices: The Slow-Motion Train-Wreck
By John Richardson OIL prices are now in bear-market territory with commodities prices in general at a 13-year low, according to the latest Bloomberg Commodities index which follows 22 different commodities. Not surprisingly, therefore, the share prices of mining and other commodity-producing companies have fallen to their lowest levels since the depths of the 2008 […]
Oil Markets Return To Supply And Demand Realities
By John Richardson ONLY a couple of months ago a lot of people seemed confident that oil prices had settled down in the region $60-80 a barrel. At that time, though, in my 13 May seven-point guide to oil markets in H2, I flagged up some of the risks ahead. These risks remain, on top of […]
Margin Upswings Will Be Shorter And Shorter
By John Richardson A GOOD chart can quite often by worth many thousands of words with the above chart serving as an excellent example. You can see how in June, scheduled and unscheduled shutdowns of Asia-Pacific ethylene capacity exceeded 6.3m tonnes – the biggest total by far since at least 2011. Markets have been further […]
Good Luck Isn’t The Same As Good Planning
By John Richardson The tail has long wagged the dog in Asia’s polyethylene (PE) market. Whilst the spot merchant ethylene market accounts for only around 5% of the total amount of ethylene that is produced in the region, ethylene spot prices drive polyethylene (PE) spot prices – with just about everyone buying and selling PE […]
Pump Oil Hard Now Or Live To Regret Production Cuts
By John Richardson OIL producers face a very straightforward choice: Pump crude as hard as possible right now or run the risk of your most important economic asset being left in the ground for good. One of the reasons is that, regardless of what you might think about the science behind claims that burning fossil […]
Peak Oil? Yes, Absolutely – Peak Oil Demand
By John Richardson YOU should never bet against the capability of oil investors to turn the world completely upside down. A great example occurred on Wednesday of last week, as Arthur Berman argues in this excellent Oilprice.com article. He points out that Brent crude surged from $62 a barrel to $65 a barrel on 10 […]
Spend Your Supply-Driven Profits On Managing Demand
By John Richardson IT has been a fantastic few months for Asia’s naphtha cracker industry as the above chart further illustrates. Even in the case of poor old, very heavily commoditised raffia-grade polypropylene (PP), variable cost margins so far this year for integrated naphtha-based players have averaged $389/tonne. The story is even better for low-density […]
Supply Exceptionally Tight, But Real Demand Still Struggles
By John Richardson WHAT a fantastic year it has so far been for margins, with the chart above showing how in one grade of polyethylene (PE), Northeast Asia (NEA) and European producers are really, really cashing in. The same applies across many others grades of both PE and polypropylene (PP). In Northeast Asia, one of […]
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