Entries from Chemicals & The Economy tagged with 'China'
Devaluations risk leading to a Cycle of Deflation
In February, the blog worried that we were at the start of a cycle of deflation, as depicted in the above chart from Comstock Partners. The warning signs were that major excess capacity was developing in many industries, and some...
China's oil imports not driven by domestic demand
A key driver for the rally in crude oil markets has been the increase in China's demand. The assumption has been that this confirms economic growth is recovering strongly. Crude oil imports have certainly been rising since Q1, and have...
Insights from LyondellBasell and BASF
Recent comments from LyondellBasell's COO, and BASF's CEO, seem worth highlighting as we come to the end of the results season. Ed Dineen noted that China's polyethylene demand seems partly linked to changes in crude oil pricing, "It turned down...
China exports deflation as it adds capacity
China will pump loans worth $1.3trn into its economy this year, equal to 1/3rd of GDP. Equally, by tying the yuan to the US$, China has achieved a major devaluation against major currencies such as the euro. The result has...
China gains as world trade slows
Sometimes a picture is worth 1000 words. The chart above, from the New York Times, highlights the massive changes that are taking place in world trade flows. These are of critical importance to the chemical industry, one of the world's...
Global chemicals volume back to 2006 level
The probable ending of the destocking/restocking phase is a good moment to look back at what has happened to chemical industry volume in recent years. The chart, based on data kindly supplied by Kevin Swift of the ACC, shows how...
Tyre duties highlight protectionist pressures
Globalisation flourished whilst economic growth was strong. Jobs lost in Western countries were replaced by new jobs. Whilst cheaper production offshore kept consumer prices low, as well as bringing more people into the world economy. But today's economic downturn means...
China says "perseverance" needed as crisis continues
China was the first major country to feel the impact of the financial crisis. In August 2008, it noted that "the era of low costs and high growth has come to an end for China, and an economic restructuring is...
Oil prices continue to plateau
Last year, OPEC meetings led to newspaper headlines. But today's session in Vienna seems to have slipped off the radar. Yet the oil market remains as important as ever to chemical companies. As the chart shows, the prime driver for...
Smart money leaves Dalian
A key rule for any successful trader is that high volume is always bullish, and low volume is negative. The blog first learnt this when trading oil products in Houston, on secondment from the UK in the 1980's. And it...
China's economic recovery "uncertain" - premier
The blog was asked to write an analysis for ICIS Insight on the growing concerns about the outlook for China's economy, and their potential impact on the global chemicals inustry. Please click here if you would like to download a...
US and EU dominate global consumption
Interesting new research from Prof Nouriel Roubini provides some perspective on relative levels of consumer spending around the world: • US private consumption accounted for 16% of total global output in 2008 • It was valued at $10trn, just ahead...
OPEC says oil market still "fundamentally weak"
The latest OPEC monthly oil report paints a bearish picture of the market. It expects OPEC to supply 28.4mbd in 2009, down 7.5% from 2008 levels. And it forecasts more of the same for 2010, expecting to supply just 28...
China's banks worry about the speculative bubble
This year, China has been the one place in the world where almost anyone can get a loan. But now, it seems policy is about to change. Zhang Jianguo, president of the 2nd largest bank, China Construction, has announced a...
Bubble, bubble, toil and trouble
Its not only the blog (and fellow blogger John Richardson), who worry about the speculative frenzy underway in China, and its impact on global polymer and chemical markets. Wu Xiaoling, former deputy governor of the central bank, has called the...
China's bank lending soars
If you want a loan, go to China. That's the message from the chart, courtesy of Credit Suisse, which shows the staggering growth in bank lending since the start of the year. Now, even the People's Bank of China is...
China's petchem imports soar on oil price speculation
After yesterday's post, Edwin Pang of Credit Suisse in Hong Kong has raised an interesting question over the likely rationale for China's massive increase in petchem imports, such as polyethylene (PE), in 2009. As the chart shows, its monthly PE...
China's speculative surge slows
Q2 saw an outburst of speculative frenzy all around the world, and in a wide variety of financial markets. China's Dalian futures market saw LLDPE volume soar to 80 million tonnes - around 4 times total annual world demand. China's...
Germany, China, struggle as exports slump
Germany and China have benefited massively from the growth in world trade since 1980. As the Wall Street Journal chart shows, 47% of Germany's GDP comes from exports. And China has a 37% dependence. US exports are just 13% of...
World Bank sees deeper recession
The chemical industry is always a leading indicator of the global economy. One of the blog's oldest friends used to be a central banker, and he made no secret of the fact that our discussions about demand levels were often...
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