China Transformation Webinar Tomorrow

Aromatics, Business, China, Company Strategy, Economics, Fibre Intermediates, Polyolefins


By John Richardson

EVERYWHERE you look is the same,  according to the Asia ICIS pricing reports for the week ending 5 September. For example:

  • Purified terephthalic acid operating rates were just 52-53% at the end of last week, down from around 60% in June.
  • Asian benzene prices had fallen to a 24-week low on sluggish downstream demand. There are no less than ten downstream styrene shutdowns taking place in Asia in September-November, but styrene inventories had still risen in eastern China storage tanks.
  • In acrylonitrile butadiene styrene, weak export demand and a poor domestic market were cited as reasons for lacklustre demand. Traders spoke of  difficulty in sourcing credit in China.

And in the key polyethylene (PE) market that we track most closely, the sentiment had turned very bearish indeed.

“Right now, the market is in a downward tailspin, at least on prices [see or above chart]. July and August were bad and September is looking soft,” a source with a leading global producer told us late last week.

Some of the talk in PE is that this was a supply-driven problem resulting from the start-up of several coal-based plants in China in July, and also higher production at local naphtha-based facilities. The standard view might therefore be “not to worry, let us shut down a few more plants and everything will return to normal.”

We disagree. This is a demand and not a supply-driven problem which, of course, effects the whole of the chemicals and polymers industry.

The deep structural changes that have to take place in China’s economy will take years to fully play out. This will have equally long lasting consequences for China and for the rest of the global economy.

What should you, as a company or an investor, do in response to these changes?

We are holding the second in  our series of China Transformation webinars on this subject  tomorrow.  The webinar is free, and there are two options to attend – one timed for Asia /Middle East; one for Europe/Americas.

The main topics are:

  • How commodity trade fraud on metals in China could lead to a new global economic crisis.
  • Problems faced by the polyester industry: Severe oversupply and a collapse of global cotton prices.
  • The reform drive and what it means for future growth.
  • The need for companies to reposition themselves as China’s economy changes.

Please register here to join the discussion.


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