By John Richardson

WE were right about China’s change of economic direction, which we identified in November 2013. We were then right about the collapse in oil prices from August 2014 onwards. And we also made the right call when we pointed out that these two events are inextricably linked.

Being right in the past is, of course, no guarantee of being right in the future. But do you really want to base your entire business strategy on the assumption that our core argument is wrong – that these two events are a part of the end of an economic Supercycle which requires you to entirely change the way in which you do business?

Do you really want to wager the entire future of your company on the notion that oil prices must inevitably return to around $80-100/bbl?

And do you really want to bet everything on the highly questionable notion that China is rapidly building a new economic growth model that requires you to make no adjustment whatsoever in the way that you do business?

Of course not. Your company is today struggling to deal with the immediate fallout from getting the oil price and China so badly wrong. So it would be very wrong to take the risk of multiplying the scale of this damage many times over during the next few years, to the point where the very survival of your chemicals companies could well be in question.

But that’s exactly what you will be doing if your sole scenario is a return to “business as usual” – the world before the about turn in China and the collapse of oil.

You instead need a rigorous set of scenarios to guarantee survival and prosperity. These scenarios are detailed in our new Study, which has now been released – Demand :The New Direction for Profit. Please click here for more details.


We put forward three demand-led scenarios that challenge the supply-driven model:

•$25/bbl oil = Collapsing demand. Emerging markets submerge, and developed markets slow dramatically as stimulus-created debt has to be repaid

•$50/bbl oil = Comfortable middle. Stimulus policies prove to have worked, demand recovers, project cancellations and revived growth prospects create a balanced market

•$100/bbl oil = Continuing tension. Further central bank stimulus takes place as economic recovery stalls, and geopolitical risks rise, along with the potential for supply disruptions

Our core argument is that companies cannot any longer simply invest in new capacity on the assumption that demand will soon catch up.

Clearly, we cannot prove at this stage that our analysis is correct. But what would happen if we were right again, this time with our “paradigm shift” argument? At the very, very least, you need a fallback plan.

Please click here to download a copy of the Prospectus, and contact me at for more information.


China: Wrong Questions Will Give You The Wrong Answers


By John Richardson IF you start with the wrong questions about China, you are ob...

Learn more

China: Ignore Misleading Analysis On Reform Reversal


By John Richardson A GREAT deal of misleading analysis has been written about th...

Learn more
More posts
China’s PP production growth could lead to big declines in 2020 imports

By John Richardson PLEASE DON’T say I didn’t warn you. China is rapidly moving towards polypropy...

Coronavirus, impact on the developing world and the scale of demand losses

By John Richardson ALL OF us are struggling to come to terms with a collapse in the global economy t...

Coronavirus, reshoring and the polyester industry: Good luck with that

By John Richardson POLITICIANS, not just including the Populist variety, are talking a lot about res...

Beware of the fragile nature of the oil and petrochemical price recovery

By John Richardson RECENT rises in oil and petrochemicals prices should not in my view be taken as a...

China petrochemical inventories build on what could be false hopes of a V-shaped rebound

By John Richardson AS PETROCHEMICALS storage space in China fills up on the hope that the country ca...

Further polyethylene rate cuts seem inevitable with no certainty on who will blink first

By John Richardson IT IS NOT just a razor-like focus on petrochemicals demand that will get you thro...

What petrochemical companies must do to adapt to a smaller coronavirus economy

By John Richardson PETROCHEMICAL companies can adapt to the coronavirus New Normal by running their ...

Coronavirus and the way forward: Forecasting micro surges in petrochemicals demand

By John Richardson THE MONTH of May is normally a low season for toluene di-isocyanate (TDI) demand ...


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