As promised, the blog looks today at the USA's trade position in polyethylene (based on data for the January-August period from Global Trade Information Services, the leading global supplier).
The chart shows US net trade (exports less imports). This peaked in 2009 (green column), with net exports of 1.6 million tonnes. Volume had risen 69% versus the 2007 level of 0.97MT (blue). But volume in 2011 has been just 1.03MT (light blue), only up 6% versus 2007.
The main reason is an overall decline in export volumes from 3.3MT in 2008 to 2.9MT in 2011:
• Mexico peaked in 2009 at 734KT, but is 679KT in 2011
• Latin America has been volatile, but peaked at 771KT in 2008
• China peaked in 2009 at 585KT, but is 192KT in 2011
• NEA peaked in 2008 at 178KT, but is 107KT in 2011
• SEA has been volatile, but 2011's 292KT is a new high
Meanwhile, net imports in 2011 at 1.85MT are equal to 2007's 1.83MT. These come mainly from Canada, whose volume of 1.19MT in 2011 is also similar to 2007's 1.17MT.
Of course, many Western readers would have expected the USA's exports to have risen since 2008, not fallen. Its cost position has improved remarkably since then, due to its new source of advantaged ethane from shale gas. The reason is that many of its major competitors do not share its financially oriented approach.
As the blog highlighted last week, most emerging economies also prioritise social and political criteria, whereby employment and strategic geo-political issues have an important role.
The blog's own research on China's Sinopec demonstrates how it effectively operates as a utility, supplying raw materials to the factories to keep people employed. Employment is also a key driver for the Middle East and many other Asian countries.
This is why an understanding of Prof Michael Porter's Shared Value approach is so important for the future. Western companies can no longer rely on the use of purely financial criteria to guide their strategy, as the world transitions to the New Normal.