By John Richardson GLOBAL manufacturing supply chains are adjusting to the US tariffs against China, accelerating a process that began a decade or so ago because of China’s ageing population versus more youthful populations elsewhere. Let’s use Vietnam as an example to first of all examine the longer term drift away from China. Since 2010, […]
Asian Chemical Connections
China trade war self-reliance push threatens ethylene glycols and PP imports
By John Richardson CHINA WILL do what suits China and not what suits the rest of the petrochemicals and polymers word. And what suits China has radically changed because of the new US approach to international relations. No longer can China depend on the US, or indeed any other country, for the petrochemicals imports it […]
China could easily become styrene net exporter as trade war drives self-sufficiency
By John Richardson CHINA MIGHT remain a major net importer of styrene by 2025, making it still the biggest importer of any country or region in the world. Alternatively, as you can see from the chart on the right, it could swing into a small net export position – or may even be exporting as […]
China MEG spreads turn negative on 171% rise in US retail prices for Chinese clothing
By John Richardson THERE are a lot of theories out there about why the spreads between Chinese mono-ethylene glycols (MEG) prices and naphtha feedstock costs have fallen in April and May of this year (see the above chart). But as I shall explain in detail later on, the only explanations that entirely stand up are […]
China’s paraxylene imports in 2019-2025 face major downside risks
By John Richardson NEVER underestimate China’s ability to execute vast and highly complex manufacturing projects very efficiently. There is of course a very good chance that my downside scenario will be wrong. It may be technically unfeasible for China to operate its new paraxylene (PX) capacity at 82% in 2019-2025, as opposed to what could […]
China benzene spreads at ten-year low on misplaced trade deal hopes
By John Richardson THE ABOVE chart shows that in April the average spread between CFR Japan naphtha feedstock costs and CFR Northeast Asia (NEA) benzene prices was just $19/tonne, its lowest level since January 2009 during the Global Economic Crisis. AS with Doctor Copper, benzene is a major raw materials building block for many manufacturing […]
Longer trade war: Impact in numbers on China polymers demand
By John Richardson WE MUST now start to quantify the impact on the petrochemicals industry of no end to the US/China trade war during 2019. Economists at Barclays estimate that a 25% US tariff on $200bn of exports could cut Chinese growth by half a percentage point over 12 months, and as much again if […]
Plastics pollution crisis: Impact on polyethylene margins in 2022-2027
By John Richardson ALMOST all countries late last week signed a UN deal to monitor the flow of hard-to-recycle plastics to poorer countries. The US was amongst the few countries which declined to sign the agreement. The deal is the result of the increase in contaminated plastic waste exports to Indonesia, Malaysia and Vietnam etc. […]
China PE demand boom will not stop further margin declines
By John Richardson CHINA’S polyethylene (PE) market is being temporarily weighed down by overstocking which is the result of the big surge in March imports. Many of the arrivals in March were of material booked late last year when oil and so PE prices were falling, drawing traders and Chinese buyers into major commitments. This […]
China holds all the petchems demand aces as it digs in for longer trade war
By John Richardson THE STRENGTH of China’s position in the intensifying trade war is further underlined by the above chart. In everything from oil and gas through to petrochemicals and finished goods, China is the world’s biggest market. Minus off China from consumption and many other developing countries, and even entire regions, can sometimes almost […]