By John Richardson The steepest decline in Japanese industrial production since March 2011 has shocked some commentators. We cannot understand why. “Industrial output dropped 3.3% in June from May, the trade ministry said today in Tokyo, more than twice the median forecast for a 1.2% contraction in a Bloomberg News survey of 31 economists. The […]
Asian Chemical Connections
China: Value For Money Replaces Luxury
By John Richardson IF you answer a knock on the door and a travelling salesman is offering you a deal that seems as if it is good to be true – e.g. a top-of-the-range flat screen TV for just $100 – what is your first reaction? Your first reaction would, of course be: “This must […]
What A “Low Growth World” Really Looks Like
By John Richardson ONLY six new US crackers would be built over the next five years because of rising construction and labour costs, said Dow Chemical’s CEO, Andrew Liveris, in an earnings conference call last week. This would be out of the 12 crackers that have been announced (see the above table). Demand would therefore […]
China Commodities: Fool’s Gold
By John Richardson GILLIAN Tett’s splendid book about the root causes of the global financial crisis, Fool’s Gold, talks about “silo thinking”. Regulators, politicians and supposed financial experts had deep expert knowledge in their chosen fields, but lacked the ability to stand back and connect the dots. This, of course, led them to miss all […]
European Energy Sovereign Wealth Fund Needed
By John Richardson THE blog met with an old friend on its recent trip to the UK, a scientist, who moaned about her local MP’s ignorance about why energy self-sufficiency was vital for any economy. “He is opposed to shale gas and shale oil because of all the concerns about fracking causing earthquakes and water […]
Indonesia’s Jokowi: Poverty Alleviation The Key
By John Richardson INDONESIA’S new president seems like a breath of fresh air because he is outside the establishment and has portrayed himself as a man of the people. But one of Joko Widodo’s problems is that the establishment isn’t going to go down with a fight, as the appeal against his victory by rival […]
China’s “Whack-A-Mole” To Accelerate
By John Richardson Mono-ethylene glycol (MEG) is the latest petrochemicals product to be caught up in real estate-linked collateral trading, an industry observer recently told the blog. “To some extent, MEG has been bought not for real demand, but instead as a financial instrument to fund property deals,” said the observer. If a product such […]
China Going To Plan: Credit Up Just 4%
By John Richardson TOTAL social financing (TSF) in China increased by just 4% in H1 of this year over the same period in 2013, according to official government figures (TSF is the measure of total new credit issued in China, via both the official banks and the “shadow” banking system). This figure is of far […]
China Still A Long Way From Solving Its Demographic Crisis
SO much for a new demographic dividend, as we warned last November when China announced that it had relaxed its one-child policy. If you recall, Beijing decided that couples would be allowed to have two children if just one of them was an only child. The previous system stipulated that both parents had to be only […]
China Peak Manufacturing Season Disappoints
By John Richardson THE chemicals industry, because it supplies so many downstream manufacturing industries, is an excellent early indicator when something is going right or wrong with an economy. Take note, therefore, of the July Volume Proxy, which was published earlier this week by Paul Satchell, chemicals analyst with UK investment bank Cannacord Genuity (the […]
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