Northeast Asian PE Margins At Record Low

Business, China, Company Strategy, Economics, Europe, Middle East, Polyolefins, US

HDPE margins.jpgBy John Richardson

THE above slide shows how bad the polyethylene (PE) market has been in 2012.

Based on data from the ICIS pricing Asian PE Margin Report, it shows how Northeast Asian high-density (HDPE) integrated variable cost margins have fallen to their lowest level since 2000.

This was supposed to be a good year, part of a gradual improvement in margins until the next industry peak in 2015-2016. We think the timing of this peak has to now be in serious doubt.

More immediately, we are struggling to find reasons why 2013 will be any better than this year.

China’s problems will take years to be resolved, assuming that they can be resolved.

The “fiscal cliff” remains a threat in the US, and the Eurozone crisis is hardly going to disappear.

Middle East PE producers did fine in 2012 because of their feedstock advantage: Their exports to China were up by 44% in January-September 2012 compared with the same periods in 2010 and 2011, according to Global Trade Information Services.

Next year, the US might also gain market share in China at the expense of the higher-cost Asian naphtha-based producers.

This prospect has edged a little closer with the fall of US ethylene prices on weaker demand and increased production.

PREVIOUS POST

South Korea's Demographic Challenges

23/11/2012

By John Richardson THE above slide shows how bad the polyethylene (PE) market ha...

Learn more
NEXT POST

New Business Mindset Needed

26/11/2012

By John Richardson THE above slide shows how bad the polyethylene (PE) market ha...

Learn more
More posts
China benzene spreads at ten-year low on misplaced trade deal hopes
19/05/2019

By John Richardson THE ABOVE chart shows that in April the average spread between CFR Japan naphtha ...

Read
Longer trade war: Impact in numbers on China polymers demand
15/05/2019

By John Richardson WE MUST now start to quantify the impact on the petrochemicals industry of no end...

Read
Plastics pollution crisis: Impact on polyethylene margins in 2022-2027
13/05/2019

By John Richardson ALMOST all countries late last week signed a UN deal to monitor the flow of hard-...

Read
China PE demand boom will not stop further margin declines
10/05/2019

By John Richardson CHINA’S polyethylene (PE) market is being temporarily weighed down by overstock...

Read
China holds all the petchems demand aces as it digs in for longer trade war
08/05/2019

By John Richardson THE STRENGTH of China’s position in the intensifying trade war is further under...

Read
President Trump’s Tweets increase risk of no trade deal until 2021
06/05/2019

By John Richardson THE PROSPECTS of a trade deal seem to have have faded into the distance as a resu...

Read
Pressure on US builds as PE exports to China tumble and EU considers tariffs
03/05/2019

By John Richardson DONALD TRUMP insisted in early March that he was willing to walk away from a bad ...

Read
China 2019 PE demand grows in double digits as PP struggles
01/05/2019

By John Richardson CHINA’S polyethylene (PE) and polypropylene (PP) markets continue to tell us so...

Read

Market Intelligence

ICIS provides market intelligence that help businesses in the energy, petrochemical and fertilizer industries.

Learn more

Analytics

Across the globe, ICIS consultants provide detailed analysis and forecasting for the petrochemical, energy and fertilizer markets.

Learn more

Specialist Services

Find out more about how our specialist consulting services, events, conferences and training courses can help your teams.

Learn more

ICIS Insight

From our news service to our thought-leadership content, ICIS experts bring you the latest news and insight, when you need it.

Learn more