By John Richardson IT WAS criminally wrong. Yes, criminally wrong. Financial speculators drove up the price oil to $100 a barrel and more, which forced developing countries to waste many billions of dollars on fuel subsidies. This was money that should and could have been spent on better infrastructure, education, healthcare and sanitation. The irony […]
Asian Chemical Connections
How To Get Through 2015 In One Piece (More Or Less)
By John Richardson EVERY time the oil price stabilises for just a few days there is pretty widespread talk of the market having found a bottom and that a rebound is about to begin. A case in point was last week, when, before the oil price fell below $50 a barrel, two days of relative […]
Oil Markets In One Word: China
By John Richardson A COMMENT I have heard so many times over the last two months is that once oil prices settle down, China’s petrochemicals buyers will have to come back in large numbers in order to replenish what must be, by now, very low inventory levels. For example, last month I was told: “If […]
US Petrochemicals: Three Predictions For 2015
By John Richardson AS you can see from the table below, there are no less than 12 US ethane-based cracker projects being planned with lots of associated downstream capacity. Theoretically, this represents: 14.8m tonnes/year of new ethylene capacity at these 12 proposed facilities. There are also eight planned expansions of existing plants, adding up to […]
China Polyethylene: Three Predictions For 2015
By John Richardson THE chart below serves as an excellent illustration of the big shift in consensus thinking about China’s overall economy, as it shows that: PE imports surged in January on the belief that China would “blink” – and they remained, on the whole, strong until October. The resilience in imports persisted despite evidence […]
Starting All Over Again: A Ten-Point Guide For 2015
By John Richardson AS chemicals companies go back to their budget plans for 2015, and redraw them entirely, here are ten things that they must take into account: The oil price is not going to return to $100 a barrel in a hurry, barring a major geopolitical shock – indeed, there is a chance that […]
So Much For The Bonus From Cheaper Oil
By John Richardson THE big turning point in Asian petrochemicals markets can be traced back to around the end of July for three big reasons: • It was broadly accepted from then onwards that China wasn’t going to change its policies. There would be no “blinking” via a big, old-style economic stimulus package. • The […]
US Petrochemicals Will Suffer From “The Blame Game”
By John Richardson THE chat below provides some very instructive reading as it shows that: Since 2000, overall real consumption in US polyethylene (PE) has fallen from around 12.5m tonnes to 12.3m tonnes (real consumption is domestic production plus imports, and then minus exports, with end-year adjustments made for any inventory distortions). Low-density PE […]
Asian Chemicals Markets Panic Is About China’s Lending
Note to my readers: I had planned to write about China’s polyethylene (PE) market today, but have decided that it is, first of all, important to further explain the reasons why Asian chemicals markets are in such distress at the moment. (I will, instead, focus on PE tomorrow). Oil prices are tumbling because real price […]
Asia’s Petchems Decline: Reject Tried And Trusted Analysis
By John Richardson ASIA’S petrochemicals traders and producers have on the whole done fantastically well over the last 20 years by sticking with tried-and-trusted ways of assessing markets. It is very tempting, therefore, to think that today’s weak demand will soon be put right through just a few production cutbacks. Last week, my colleagues at […]