By John Richardson ASIAN naphtha cracker operators will see a 50% decline in average spreads, or differentials, between their raw-material costs and finished product prices in 2018 compared with last year, according to my forecasts in the above chart. This will be the result of a further steep rise in oil prices and increased polyethylene […]
Asian Chemical Connections
China’s Accelerating War On Air Pollution: Latest Implications For Petchems
By John Richardson CHINA has steadily increased the intensity of its war against pollution over the last three years – especially the war against pollution generated by burning coal. This has major implications for the petrochemicals industry, which we will detail later on this post. Firstly, though, here is a timeline of events over the […]
Asian Polyethylene: The Butadiene “War Chest”
By John Richardson HERE we go again. The above chart shows how the spread between CFR Japan naphtha costs and CFR Northeast Asian (NEA) butadiene prices has been steadily climbing over the last few months. In January of this year it reached $2,277/tonne – historically very high but still some distance from the all-time high […]
Butadiene: Only The Supply Side Logic Adds Up
By John Richardson LOGICALLY, yes, if you look at the supply side only, there seems to be a strong case for on-purpose butadiene production. Here is why: US cracker operators have substantially lightened their existing cracker feedstock slate and, of course, all of the country’s new crackers that are due on-stream over the next 5-10 […]
China’s Auto Demand Growth: No Longer As Predictable
By John Richardson WE used to live in a linear world where GDP growth was nearly always on the increase and there was a very close linkage between the growth in any overall economy and the rise in demand for chemicals and polymers. It’s all about throwing darts at a metaphorical dart board, of course. […]
China Producer Price Deflation Continues
By John Richardson China’s factory-gate prices have fallen for 14 months in a row because of huge overcapacity in many industries, said the Wall Street Journal in this article. “Producer prices – a measure of prices of goods before they reach consumers – dropped 2.4% in April, the sharpest decline since October, paced by particularly […]
Dictating Chemicals Demand
By John Richardson SOME commodity chemicals companies still assume that, if they build new supply, demand will always eventually catch up with supply. The risks of not building new capacities, at times of easy financing and feedstock availability, are also viewed as too great. These include deteriorating economies of scale and loss of […]
Butadiene Oversupply Threat
By John Richardson THERE is a lot of talk at the moment about on-purpose butadiene, via the butane dehydrogenation process, because of the recent extreme market tightness . The tightness is the result of a shift to lighter cracker feedstocks and reduced operating rates at naphtha crackers in Europe. Future feedstock patterns are also not […]
The Butadiene Rollercoaster
By John Richardson The remarkable rollercoaster that is butadiene, and its derivatives, continues. Although the synthetic rubber market for tyres in China appears to be strengthening, acrylonitrile butadiene styrene (ABS) remains under pressure. And, in a reflection of what is a structurally extremely tight market for butadiene, LG Chem is talking about further reducing operating […]
Butadiene An Extreme Example
By John Richardson BUTADIENE is an extreme example of what my fellow blogger Paul Hodges described yesterday as happening across several major petrochemicals markets. Panicky buyers have, just as they did last year, “bought forward” in the hope that by so doing they will hedge against even higher feedstock costs in the future. But this […]