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China “Base Case” Indicates Another Good Year

By John Richardson LAST year was a tremendous year for polyethylene (PE) exporters to China, according to data provided by US-based International Trader Publications, the US-based trade data and analytics service. They conclude that China’s imports of high-density polyethylene (HPDE) and low-density PE (LDPE) posted strong gains. Volumes for 2013 were up 18% and 10%, respectively, versus […]

ExxonMobil, Energy Efficiency And Innovation

By John Richardson SAVING money through energy efficiency, along with innovation, will be two of  the keys to success in the New Normal because  demand-growth patterns will be very different than during the Supercycle. The suspension, which guaranteed success for everybody, has gone. We are therefore going to see some creative destruction amongst chemicals and […]

Dow And Commodities-Specialities Integration

  By John Richardson IS diversification itself a problem in commodity chemicals and speciality companies with operations under one roof, or is it more how this diversification is handled? This is a question raised by this excellent Insight article, from the blog’s ICIS colleague Joe Chang, which revisits the issue of hedge fund Third Point’s […]

China’s Rough Ride To Sustainable Growth

By John Richardson IT makes no sense whatsoever to think that the transition to another type of growth in China will inevitably be so smooth that there is hardly any disruption to the global economy, and, with it, of course, the chemicals industry. The issues facing China are too complex and too myriad for the […]

Getting China And The Fed The Wrong Way Round

By John Richardson MOST newspapers and wire services still seem to have got it in the wrong way round. Last week, as Argentina’s Peso crisis began, they continued to identify Fed tapering as the number one threat to emerging markets followed by China. But here’s a reminder: The Fed has spent some $3 trillion on […]

Thailand: Papering Over the Cracks May Be Harder

By John Richardson THE longer that the political crisis in Thailand drags on, the more we worry that economic growth will be badly affected. Tourism, for example, is around 10% of the country’s GDP and the Tourism Authority of Thailand estimates that hotel occupancy rates in Bangkok are down to just 30-40%. Nearly $4 billion […]

Dow Chemical And Back To The Future

By John Richardson HOW the world has changed. Dan Loeb of the Hedge fund, Third Point, wrote in a letter proposing a spin-off of Dow Chemical’s petrochemicals assets: “We suspect that Dow’s push downstream has led the company to use its upstream assets to subsidise certain downstream derivatives, either by sacrificing operational efficiency or making […]

China Is “The Fragile One”

By John Richardson THE “Fragile Five” might, as we discussed on Monday, have become “The Exposed Eight” developing countries threatened by a disorderly Fed tapering. But what if, in all the focus on the Fed cutting back on quantitative easing, we have overlooked a far bigger withdrawal of central bank largesse – that which is […]

China: The Cost of Shutting Down

By John Richardson ONCE a petrochemicals plant is built it is pretty hard to shut it down. This might well apply to Europe, which is why we think talk of widespread cracker and derivatives closures to make way for highly competitive new US and Middle East capacity could be overdone. And definitely, without any shadow […]

“Fragile Five” Now “The Exposed Eight”

By John Richardson IT used to be just the “Fragile Five” – Brazil, India, Indonesia, South Africa and Turkey. But last week, the Financial Times, drawing on data and analysis from Schroders, added three more countries to the list of those most-exposed to Fed tapering: Hungary, Poland and Chile. Thus we needed a new handy […]

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