Future Winners in today’s New Normal world will be those companies that realise that the key question is no longer, “Do we have low-cost supply?” It is instead “Do we have a customer who is willing and able to buy from us”.
Chemicals and the Economy
Polyethylene’s crisis will create Winners and Losers
Polyethylene markets (PE) are moving into a crisis, with margins in NE Asia already negative, as I have been forecasting. Scenario planning is now a matter of potential life or death for companies likely to be impacted over the next 12-18 months. The collapse in margins is already quite dramatic as the chart based on […]
Petrochemicals must face up to multiple challenges
Europe’s petrochemical sector must prepare now for the trade war, US start-ups, Brexit and the circular economy, as I discuss in this interview with Will Beacham of ICIS news at the European Petrochemical Association Conference. With higher tariff barriers going up between the US and China, the market in Europe is likely to experience an influx of […]
Ethane price hikes, China tariffs, hit US PE producers as global market weakens
Sadly, my July forecast that US-China tariffs could lead to a global polyethylene price war seems to be coming true. As I have argued since March 2014 (US boom is a dangerous game), it was always going to be difficult for US producers to sell their vastly increased output. The expansions were of course delayed […]
US-China tariffs could lead to global Polyethylene price war
I was interviewed on Friday about the likely impact of President Trump’s trade wars on the global chemical industry by Will Beacham, deputy editor of ICIS Chemical Business. His interview is below. The introduction on Friday of trade tariffs by China and the US is the first step in a trade war that could turn into […]
US ethylene prices near all-time lows as over-capacity arrives
US ethylene spot prices are tumbling as the major new shale gas expansions come on line, as the chart based on ICIS pricing data confirms: They began the year at $617/t, but have since more than halved to $270/t on Friday They are only around 10% higher than their all-time low of $240/t in September […]
Oil prices at $50/bbl, China slowdown – the New Normal arrives
Welcome to the New Normal. The Great Unwinding of policymaker stimulus has led global oil prices to drop back to $50/bbl. Meanwhile China, the major source of demand growth since 2009, is now seeing a major slowdown. And, of course, this is still only the beginning of the great transformation that is now underway as we enter […]
Demand now the key driver for future US petchem profitability
Will the US be able to sell all its planned new petchem volumes? That is the 3rd topic in the blog’s series about critical areas where we all think we know what’s happening, but may end up being surprised. We all know that the US now has a major feedstock advantage versus Europe, Asia and Latin America due […]
V is for Volatility
Unilever CEO Paul Polman suggests we are living in a VUCA world, as we discuss in chapter 11 of Boom, Gloom and the New Normal. Volatility, Uncertainty, Complexity and Ambiguity make planning for the future more difficult than for a generation. This week, the blog will run a special series that examines how this VUCA […]
Supply shortages drive olefin market profitability
The above chart would have seemed unbelievable at any time in the past 30 years. It shows the performance of propylene and butadiene relative to ethylene. Not because it shows butadiene prices racing ahead relative to ethylene (green line). This happens routinely during a downturn, as tyre demand is more robust than for polymers. If […]
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