By John Richardson THIS MIGHT turn out to be another good year for Chinese PE demand growth as the preliminary estimate from our China team is that 2018 consumption growth will be 7% compared with last year. This compares with the forecast in our Supply & Demand database of a 5.4% increase. The above […]
Asian Chemical Connections
China PP growth at risk from lower auto sales, trade war
By John Richardson WE EXPECT China’s PP demand to rise by 6.5% in 2018 to total consumption of 27.8m tonnes. We then expect a further increase of 6% to 29.3m tonnes next year. It is too early to say for certain, but there is a risk that 2018 and 2019 PP demand growth will be […]
PE margins turn negative as economic risks build
By John Richardson CASH margins for Asian linear-low density polyethylene (LLDPE) for naphtha-based producers have turned negative for the first time since Q1 2015, according to an industry contact. And this is of course before the flood of new US LLDPE production arrives in Asia. No matter how you crunch the numbers, the likely increase […]
Bursting of the US debt bubble and effect on petchems
By John Richardson THE US economy is in a debt-induced bubble that will sooner or later burst with of course major negative consequences for the rest of the world. You cannot print babies. The huge amounts of money that the US Federal Reserve has pumped into the US economy since 2008 combined with last year’s […]
China Environment Campaign Creates Global Inflation Threat
By John Richardson THE ABOVE chart shows the major role that China has played in driving global inflation, deflation – and now inflation again – since 2008. There is a close link between the movements in China’s Producer Price Index (PPI) and Consumer Price Indices (CPIs) in the Eurozone, the US and the UK. The […]
China Continues Deleveraging With Reforms Set To Accelerate….
…global risks remain elevated and so beware of complacency By John Richardson THE conventional view is that China has stimulated its economy to perfection ahead of the important 19th National Party Congress which begins in Beijing on 18 October. The theory goes that President Xi Jinping has kept the lending spigot firmly open in order […]
What Exclusion From China’s One Belt, One Road Looks Like
By John Richardson IS the whole world really turning again free trade? No, if you consider the potential improvement in trade flows between the 65 mainly developing countries which make up China’s One Belt, One Road (OBOR) initiative. What we could instead see is the creation of the world’s biggest free-trade bloc, accounting for 40% […]
China’s “Teapot” Refineries: Example Of The Bigger Picture
By John Richardson IT is all about jobs, jobs and more jobs in politics. Promising to create and maintain employment is how politicians win office. And delivering on these two pledges keeps them in power. But let’s not by cynical about this. You can make a very strong argument that whilst keeping a particular factory […]
China Drives Down Yuan To Protect Jobs
By John Richardson WE first warned in December 2011 that as China’s economic reforms accelerated, Yuan depreciation was a strong possibility. And then in May of last year, we picked up the theme again by again suggesting that as growth in China slowed, Beijing would attempt to support the economy through boosting exports via a […]
The Petronas Decision: What It Means
By John Richardson LAST week’s decision by Petronas to go ahead with its $27bn refinery and petrochemicals complex at Pengerang in Johor, Malaysia, tells us that: Nation building remains important in the petrochemicals business. This project will create huge further economic value for Malaysia through all the construction and operating jobs created and the revenues […]