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Asian Chemical Connections

ExxonMobil, Energy Efficiency And Innovation

By John Richardson SAVING money through energy efficiency, along with innovation, will be two of  the keys to success in the New Normal because  demand-growth patterns will be very different than during the Supercycle. The suspension, which guaranteed success for everybody, has gone. We are therefore going to see some creative destruction amongst chemicals and […]

Dow Chemical And Back To The Future

By John Richardson HOW the world has changed. Dan Loeb of the Hedge fund, Third Point, wrote in a letter proposing a spin-off of Dow Chemical’s petrochemicals assets: “We suspect that Dow’s push downstream has led the company to use its upstream assets to subsidise certain downstream derivatives, either by sacrificing operational efficiency or making […]

Gas, Gas, And Perhaps Even More Gas

By John Richardson THE global petrochemicals industry is stepping on the gas as it accelerates both capacity expansions and the restructuring of existing assets. Apologies for the pun. In the US, of course, some 25m tonnes/year of ethylene capacity is due to be added, most of it after 2017, thanks to big volumes of cheap […]

Oil Market Risks For 2014

By John Richardson PAUL Satchell, the UK-based chemicals analyst with glob investment bank Cannacord Genuity wrote  in his December Volume Proxy* report, which was released earlier this month: “It has long been our opinion that real demand fundamentals in commodity chemicals have been so poor since mid-2010 that inventory cycles have become the prime determinant of […]

Chemicals Companies Risk Losing Market Muscle

By John Richardson IT used to be so easy. All you had to do was build a feedstock-advantage plant outside China and/or build a plant in China and demand would take care of itself. The reason was that China was on a roll from 2001 onwards thanks to its accession to the World Trade Organisation, […]

The Rebirth Of Naphtha Cracking

  By John Richardson Might cracking naphtha in Asia, Europe, and perhaps even the US, once again become so attractive that it starts to challenge the big advantage currently being enjoyed by cracking ethane? Yes, perhaps. Opportunities could arise to take advantage of distressed supplies of naphtha from refiners under severe loss-making pressure. Shutting many […]

Global Petchem Markets Turn Bearish

By John Richardson EXCESSIVE inventory building down all the major petrochemical value chains is a global rather than just a Chinese problem, according to Paul Satchell – the UK-based chemicals analyst with global investment bank  Canaccord Genuity in his latest Volume Proxy research note. “The Volume Proxy continues to decline, with the index now in clear […]

It Is Not A Question Of If, But Rather When

By John Richardson IT is not a question if, but rather when Xi Jinping and Li Keqiang decide that enough is enough and get on with tackling China’s growing financial imbalances. That is if they don’t want the whole house of cards to eventually collapse, which we believe is not the case. These imbalances have […]

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