It could be a very difficult H2 for anyone involved in the Asian oil and polymer markets. And given the global importance of these markets, everyone around the world will also feel the impact. The issue is that most business strategies have been based on 2 increasingly unlikely assumptions: Companies all assumed that oil […]
Tag Archives | polypropylene
Wrong assumptions on China growth and oil prices mean danger lies ahead for refiners and polymer producers
Difficult times lie ahead for global polymer markets, as I note in a new analysis for ICIS Chemical Business. In the short-term it is clear that downstream users have, once again, been busy building stock in recent weeks as the oil price rose. But now, finance directors are getting calls from their bankers asking about […]
Difficult times lie ahead for global polymer markets. It would be bad enough that downstream users have been busy building stock in recent weeks as the oil price rose, as Linda Naylor reports on polypropylene (PP) for ICIS: “PP demand is slow, slower than many expected, and the strong growth of recent months is now […]
China used to be the manufacturing capital of the world. It would buy raw materials, and sell finished products to the West. But these volumes are now in decline. The West’s ageing populations already own most of what they need, and their incomes are reducing as they enter retirement. So China’s business model is changing. […]
“The reality is the US from a chemical standpoint is a very mature market. We have some demand growth domestically in the US but it’s a % or two – it’s not strong demand growth,” Pryor said, adding that polyethylene hardly grew in the US in a decade. “That is not going to change. “The […]
Everyone wants to assume that markets will soon be back to “normal”. Consensus thinking now accepts that China will be a bit slower than before – but it argues that 6.5% GDP growth is still pretty good, even if it isn’t double digit. And it suggests that persistence, and “staying the course” is vital for […]
Everyone is now beginning to notice the change in economic policy in China. And concern is rising about the outlook for all those new petchem investments about to come online, whose rationale has been the need to supply ever-increasing growth in Chinese demand. The chart above highlights the reality behind this wishful thinking: Everyone “knew” […]
Polypropylene (PP) is one of the world’s major plastics – used in areas as diverse as car bumpers and food packaging. And in recent years, consumption has soared due to China’s seemingly insatiable demand, as it became the manufacturing capital of the world. But now, all that is changing. As we warned in chapter 2 of ‘Boom, Gloom […]
More and more commentators are beginning to recognise that deflation is becoming inevitable in many major economies: China’s producer prices fell -4.3% last month, and its consumer prices rose just 0.8% Eurozone consumer prices fell in December to -0.2%, and are likely to have fallen further in January US prices rose just 0.8% in December and are […]
Turkey is the blog’s “go-to” market when it wants to confirm trends in global markets. The reason is that Turkey has a very successful downstream industry, but has failed to invest in upstream capacity. This means it is essentially an opportunistic market from a sellers’ viewpoint. During good times, exporters will only divert product from […]
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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 as 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.