Last March, the blog highlighted the major changes taking place in ethylene, propylene and butadiene prices versus naphtha. It also analysed them in ICIS Chemical Business in September. The above chart now summarises the 2010 outcome, using European prices to enable comparison over the last 30 years. It was a most remarkable year. The chart […]
Tag Archives | Polyethylene
The blog was very pleased to talk recently to Business News Americas about developments in Latin America. Please click here if you would like to read the full interview. It highlights the key role being played by Brazil’s Petrobras, particularly in the development of ‘green polymers’. These are still very small in volume, compared to […]
Oil price rises reduce chemical demand. Initially, as we saw in 2007 – H1 2008, and in 1979 – 80, everything seems fine. Consumers continue to buy, and we all reassure ourselves that demand is still robust. But, in fact, end-use demand starts to fall when prices rise, as individuals cut back on discretionary spending […]
China’s Dalian futures market has become a hotbed of speculation over the past 2 years, since the government doubled bank lending to $1.4trn during 2009, equal to 1/3rd of GDP. Traders have particularly focused on the assumed linkage between LLDPE (linear low density polyethylene) and crude oil, with price movements mirroring each other most months. […]
The past fortnight has confirmed the strong linkage between Dalian futures trading, and financial market speculation. Dalian prices (red line) for linear low density polyethylene (LLDPE) rose steadily in early September, as traders bet on higher crude prices. They had gained RMB 600/t ($90) by last Wednesday. But then rumours began flying that China’s interest […]
Undertaking fundamental analysis of a market can be a tedious business. You have to try and understand what uses the product might have, and the alternatives for the feedstocks. You might even have to look at inventory, and forecast future supply/demand levels. Luckily, however, for the modern financial investor, these sad disciplines have been resigned […]
As promised on Saturday, today’s post looks in more detail at the major change taking place in the relationship of propylene to ethylene prices. When the blog joined the chemical industry in the 1970′s, propylene was often regarded as a disposal problem by many cracker operators. They ran their plants to produce ethylene, which was […]
A year ago, China’s Dalian futures exchange was hitting its peak, in terms of polymer volume. The Linear Low Density Polyethylene (LLDPE) contract saw 80 million tonnes (blue line) traded in April. This was more than 3 times total annual world production. But as the chart above shows, volume last month was ‘only’ 21MT – […]
China’s demand has been the main driver for the global chemical industry over the past year. And prices on China’s Dalian polymers futures exchange have been a key indicator of the boom. But now, the rally seems to be running out of steam. The key signs are in the above chart: • At the end […]
A remarkable thing happened this week in European olefin markets. Contract prices for butadiene and propylene were finalised for April/Q2 at higher levels than for ethylene. This has never happened before, in Europe or other regions. The chart, based on ICIS pricing data, shows how ethylene (blue line) has normally been the highest priced olefin. […]
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Paul Hodges is Chairman of International eChem, trusted commercial advisers to the global chemical industry.
The aim of this blog is to share ideas about the influences that may shape the chemical industry over the next 12 – 18 months. It will try to look behind today’s headlines, to understand what may happen next in important issues such oil prices, economic growth and the environment. We may also have some fun, investigating a few of the more offbeat events that take place from time to time. Please do join me and share your thoughts.
Between us, we will hopefully develop useful insights into the key factors that will drive the industry's future performance.