Today's purchasing manager index shows China's manufacturing is now contracting across the country.
As always, petchem markets have been leading indicators of this slowdown. And worrying, China's polyethylene (PE) markets are showing no sign of any improvement as we head to year-end.
Volume grew 53% between 2008 - 2010 as a result of the government's massive stimulus and bank lending programmes. But the brakes have been applied since then to try and stop inflation getting out of control.
In addition, China's own supply portfolio is in the middle of major change, as the chart shows based on trade data from GTIS:
• Total demand in January-October was flat versus 2010
• Domestic production was up 2%
• Imports were also flat, whilst exports (from a low base) up 71%
• Middle East net imports were up 22% and SEA net imports up 13%
• Net NEA imports were down 21%; NAFTA down 37%; EU down 42%
This is not good news for any company hoping that growth in China during 2012 might substitute for the continued slowdown in Europe and the USA.