By John Richardson IT has been a remarkably strong few years for the US polyethylene (PE) business. The shale gas revolution has sent ethane costs plummeting, resulting in the kind of margins that you can see in the above chart. Lower oil prices have made naphtha cracking a lot more competitive of late, but the […]
Asian Chemical Connections
Why Oil Prices Could Be At $35/bbl Or Lower By Q4
Saudi Arabia and the rest of OPEC may regret their decison to cut production, as this has led to a resurgence in US shale-oil production – and a further wave of innovation in shale technologies. Combine this with a slowdown in the Chinese economy and oil prices could be at $35/bbl or less by Q4 […]
Why The US Will Fail To Reach 3% GDP Growth
By John Richardson THE WHITE House has to clear two major barriers if it is going get anywhere close to its target of raising US GDP growth to 3% a year. Over the past decade, the economy has grown at an average of about 2% a year. The Congressional Budget Office predicts annual average growth […]
China Moves Towards Commodity Grade PE Self-Sufficiency By 2025
By John Richardson THE argument I’ve been making for a couple of years now is that the history of petrochemicals in China suggests a constant drive towards much greater self-sufficiency. No value chain is immune, I have kept contending. The recent history of a sharp rise in self-sufficiency in polyvinyl chloride (PVC), purified terephthalic acid […]
Buoyant, Calm Financial Markets Fail to Reflect Growing Risks
By John Richardson THE Chicago Board Options Exchange’s (CBOE) volatility index fell to its lowest level since 1993 on 8 May. But we knew then that the China economy was slowing down – and that very probably, the Trump administration would fail in its efforts to achieve meaningful tax cuts and infrastructure spending. Financial markets […]
China’s Drive To PX Self-Sufficiency Again Shows Failure Of Conventional Thinking
By John Richardson BACK in November 2014, when I first suggested that China might move to self-sufficiency in paraxylene (PX), my blog post was met with widespread scepticism. At that time, China was moving from a major import position in purified terephthalic acid (PTA) towards becoming a net exporter. This led to a lot of […]
China’s Polyethylene Market Faces Long Destocking Process
China’s polyethylene (PE) imports surged and domestic production saw strong growth in Q1. This occurred as the economy slowed down on reduced availability of credit and the pollution clean-up. Even if global producers saw this coming, they had no other choice but to raise exports to China late last year for arrival in Q1. This once again […]
China’s Lock-Step Moves On Credit, Pollution Threaten Global Economy
China’s renewed efforts to tackle excessive lending and pollution are closely linked as progress on deflating the 2016 credit bubble will also see progress towards cleaning-up the environment. This will lead to quite a sharp slowdown in GDP growth during the rest of this year which China is in a good position to weather because of strong growth in Q1. But globally, […]
French Election: Le Pen Could Have Won Under Electoral College System
Political populism is far from being a spent force despite Sunday’s French presidential election. Indeed, if France has an electoral college system like the US, Marine Le Pen might have even won. Neither is political uncertainty in any way diminished with many outcomes still possible. And Emmanuel Macron’s victory seems to have increased the likelihood of […]
China’s Polypropylene Market Reflects Wider Economic Problems
By John Richardson WHEN traders acquired big volumes of polypropylene (PP) cargoes to export to China at the end of last year for arrival in Q1, they were confident that the country’s domestic market would easily absorb just about every single pellet in every single container. Their confidence was based on the recovery in China’s […]
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