By John Richardson THE BALTIC DRY INDEX, one of the excellent barometers of overall economic activity, was late last week at its lowest level since June on a slowing Chinese economy, easing congestion at Chinese ports and a fall in Chinese coal imports (more on this in a moment). “The index was around 1,000 a […]
Asian Chemical Connections
Oil at $58-69 over next year as focus switches to demand
Guest blogger today is again Ajay Parmar in the second his posts. He is a chemical engineering professional with 5 years of industrial experience in oil refining, primarily in a process engineering capacity.He joined ICIS in 2018 as a Senior Analyst and currently works on developing a price forecasting model for crude oil and refined […]
2018 Oil and Petchems: Risk Of Mistaking Apparent For Real Demand
By John Richardson PERHAPS the most important recent single paragraph of analysis, in the huge volume of analysis out there about oil markets, was this from Nick Cunningham in a 24 December article on oilprice.com: The [global crude] inventory surplus [OECD numbers] has dramatically narrowed this year, falling to just a little more than 100 […]
Cheap Oil Raises Naphtha Cracker Over Investment Risk
By John Richardson THE ABOVE chart shows that from January 2015 up until November of this year, the Asian naphtha cracker industry has been making a great deal of money. The orange bars are the premiums in percentage terms between feedstock costs and the prices of one grade of polyethylene (PE) – high-density PE injection […]
Crude Drives Asian Polyethylene Spreads To Three-Year Low As 2018 Risks Build
By John Richardson IN MARCH 2016 we gave three scenarios for crude-oil prices: Collapsing Demand where we saw crude falling to $25/bbl on weak global demand that would make it impossible to repay much of the huge debts that had been built up since 2008. This is the result of economic stimulus polices that we maintain […]
Asian Polyethylene Producers: What You Must Do Now $70 Crude Is More Likely
By John Richardson THE facts on the ground in global crude markets have shifted even further in just two days. Now it seems more likely that oil prices will rise to $70 a barrel or above in Q1 of next year, possibly even earlier. What has changed are the ramifications of Saudi Arabia’s anti-corruption campaign. […]
Crude Oil Prices In 2018: Impact On Naphtha-Based Polyethylene
By John Richardson I WILL explain the full significance of the above charts for the Asian and global polyethylene (PE) industries later on this is post. In short here, though, a great deal hinges on next year’s oil prices, with the possibility that there is more momentum left in today’s rally. And of course […]
How US Polyethylene Exports To China Could Come To A Halt
By John Richardson THE US has abundant shale gas reserves that have in effect been solidified into new polyethylene (PE) capacity, which is largely for export as this is a cheap way of shipping ethane. If you subscribe to the standard view of how the world’s economy will behave over the next decade, growth will […]
China To Now Raise Ethylene Capacity By 84% As Self-Sufficiency Drive Accelerates
By John Richardson SINCE my last update on 18 September, our ICIS China team have discovered a further 2.4m tonnes/year of ethylene capacity being planned in China via the steam cracker process (see the updated table above, with the changes from September indicated in red). There will also of course be more propylene via steam […]
US Trade Policy Has So Far Bought China More Time…
…..But any number of outcomes remain possible, which underlines the fact that we live in a world of elevated political risk. Chemicals companies must, as a result, build multiple scenarios for future economic growth and trade flows. By John Richardson TIME was a commodity that China didn’t think it had very much of as recently […]