By John Richardson THE MAINSTREAM view is that there is nothing fundamental about the decline in new vehicle sales in China. Conventional analysis blames the 2018-2019 slump on the 50% cut in value-added taxes on new autos that came to end in December 2017. This brought forward demand as buyers scrambled to beat the end […]
Asian Chemical Connections
Asian copolymer polyproplyene used as a sink for growing oversupply of ethylene
By John Richardson A SURE sign that the Asian ethylene-to-polyethylene (PE) markets are distressed comes from the above chart on the left which shows declines in block copolymer polypropylene (PP) premiums over homo-polymer raffia-grade PP since June of this year. In October in Southeast Asia (SEA), the price for the normally higher value block copolymer […]
Asian polyethylene shutdowns? Once again, good luck with that idea
By John Richardson I was new to the game as I had only been analysing the petrochemicals business for 12 months. Hence, when a US industry executive told me that South Korean cracker-to-polyethylene (PE) plants would shut down, during the Asian Financial Crisis, I almost believed him. This was until I made my first visit […]
Europe to become much more self-sufficient in polyethylene because of sustainability
Yes, I know I promised to focus on Asia and its cracker-to-PE industry today and how the region will not see shutdowns that will make way for the big increase in US production. This will still be a theme of a later post. But it occurred to me, after my post on Sunday, that I […]
Environmental taxes on US polyethylene shipments to the EU seem inevitable
By John Richardson IT ALL seemed to make perfect sense at the time. Feedstock and financing were incredibly cheap and trade barriers kept falling. Although there were some faint and distant public rumblings about plastic rubbish, most of the public and the majority of legislators were not bothered about the issue. The global economy was […]
The global polyethylene paradigm shift of permanently weaker demand
By John Richardson MALCOLM GLADWELL, in his very thought provoking book The Outliers, writes about what we think is gut instinct, but is instead the result of a minimum of 10,000 hours of doing something: Sub-conscious expertise that tells us how to think and react in most situations because we’ve been here before. So, when […]
Vietnam polyethylene demand boom may not last because of infrastructure pressures
By John Richardson LET’S start with some good news: Vietnamese polyethylene (PE) demand looks set to grow by 16% in 2019 over last year compared with our base-case assumption of 8%. This would deliver 131,000 tonnes of demand more than we have forecast (see the above chart on the left). Note that the same surely […]
Shift in supply chains away from China adds costs, complexities and risks for petrochemicals
By John Richardson AS PETROCHEMICALS and other manufacturers scramble to relocate their businesses away from China in order to compensate for the trade war, they are discovering that there can be no replacement for China. China has been building up its global manufacturing dominance since as early as the 1980s. In the process it has […]
IMF confirms global economy all about China as US threat to growth persists
By John Richardson DON’T SAY I didn’t tell you. An important new IMF study confirms what I’ve been arguing for a long time: China has overtaken the US to become the biggest locomotive of global economic growth. In the five years between 2013 and 2028, China accounted for 28% of all global growth, behind the […]
India must forget trying to follow China and should instead launch a Green New Deal
By John Richardson DON’T WORRY, I am told, India is on the way. As China undergoes major structural changes which guarantee much lower petrochemicals and polymers demand growth over the long term, it is widely assumed that India will pick up the mantle. But that what happened in China was an economic, social and political […]