By John Richardson

Are there more hedgehogs in the chemicals industry than foxes? This thought came to the blog after meetings with industry executives this week during its latest visit to Singapore.

Bear with us and we will, we promise, as quickly as possible get to the point.

The philosopher Isaiah Berlin, in his famous essay “The Hedgehog and the Fox” divided writers and thinkers and two categories: The hedgehogs who view the world through the lens of a single defining idea and those who draw on a wide variety of experiences and for whom the world cannot be boiled down to a single idea.

The fairly senior (not too senior to have lost touch with conditions on the ground, but senior enough to get the picture) polyolefins company sales and marketing executives we have met with are definitely foxes. They listen to their teams on the ground in China and therefore have so far this year identified for us:

  • The rapid rise in the income levels of the country’s poorest people, thanks to a government mandate. This is quite likely to result in polyolefins demand growth in excess of what will be declining overall GDP growth numbers.
  • Growing food contamination concerns that have again benefited polyolefins growth well in excess of this year’s falling GDP growth. More and more people are switching to pre-packaged food, which, of course, is wrapped in polyethylene (PE) and polypropylene (PP) – and also higher-grade wrapping material that provides better shelf-life protection.

The hedgehogs cling on to the single defining idea that all you have to worry about, as we discussed many times before, is that all you have to do is build ever-larger volumes of competitive capacity and the demand will come.

We grow ever-more frustrated and bewildered in some of our discussions with those who cling to this single defining idea. In more detail, they still think, despite all the evidence to the contrary, that all we have to do is endlessly discuss feedstock advantage, location, technology etc and these factors alone will guarantee success. It is amazing how much time is devoted to these issues, whereas the demand side of the equation is given scant attention because it is too difficult to assess and/or it is thought to be the responsibility of other people – i.e. economists.

The blog thinks that we are at a crucial turning point. The announcements from today’s Federal Open Market Committee Meeting might or might not send emerging-market currencies, equities and bonds into a further tailspin. But what is clear is that we are nearing the end of unsustainable credit-supported growth via the Fed. We are also nearing the end of equally unsustainable credit-fuelled growth from the other big central bank that has also encouraged hedgehog thinking – the People’s Bank of China.

As my colleague Nigel Davis wrote in this very thoughtful ICIS Insight article:  “Developing nations can’t revert to pre-crisis growth strategies in a changed economic and global financial environment, the United Nations trade and development arm, UNCTAD, warned last week.

“Much slower global growth means that emerging economies would be better advised to place their bets and attempt to stimulate domestic demand through a broader based domestic consumer-driven growth model.”

Hear, hear.


Selling To The Base Of The Pyramid


By John Richardson As the slide above slows, some four billion of the world̵...

Learn more

The FOMC Decision And Tackling Leprosy


                    Ben Bernanke   Please note that before re...

Learn more
More posts
How we could all end up as losers from President Trump’s trade policies

The views below are my own, and, as always, do not express the opinion of ICIS By John Richardson RE...

President Trump’s tariff concession adds to uncertainties as we drift towards a bipolar world

The following opinions are my personal views, and, as always, do not express the views of ICIS By Jo...

China PE overstocking at above a million tonnes as Beijing struggles to boost economy

By John Richardson EVEN IF our base case growth rate* for PE in China in 2019 proves to be correct t...

China trade war duties on US LDPE “very likely” as global recession concerns grow

By John Richardson IT IS very likely that China will impose 25% additional imports duties on LDPE in...

US declaring China currency manipulator risks 10.8m tonnes of global petrochemicals demand

  By John Richardson BY PLAYING with fire President Trump has very likely set the forest on fir...

Trump latest tariffs risk global recession, 3.8m tonne lost PE demand

By John Richardson PRESIDENT Trump is playing with fire as a result of his plan to impose 10% import...

As trade talks resume make sure your expectations are very low

By John Richardson DON’T BUILD your mind up over this week’s US/China trade talk as major breakt...

BASF’s shocking Q2 results should have been no shock at all

y John Richardson NOBODY should be surprised by the BASF results for Q1 2019 where, on a year-on-yea...


Market Intelligence

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

Learn more


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