By John Richardson Confidence among Middle Eastern petrochemical producers remains high because they obviously now that as long as oil prices do not collapse they will continue to make excellent money, said a chemicals analyst. The blog believes that there is a very strong chance that crude will collapse to as little as $25 a […]
Asian Chemical Connections
Why China PE Demand Will Not Grow In 2011
By John Richardson THE blog hears that some industry observers are persisting with the Supercycle theory for petrochemicals based on “decoupling” – i.e. emerging markets will compensate for any new recessions in the West. We find this baffling as evidence points to a lost year of growth in China. The prospects for next year seem […]
Limited Help For China’s SMEs
By John Richardson THE credit crisis that is limiting chemicals and polymer trade in China is continuing, even though local initiatives have been launched to help small and medium-sized enterprise (SMEs) with the central government indicating that more help could be on the way. As we have discussed before on the blog, the trade finance crisis […]
Oil demand set to slip, will prices follow?
By Malini Hariharan The International Energy Agency (IEA) has once again trimmed its oil demand forecast for 2011. And rising fears of a sustained global economic slowdown have also prompted the agency to cut the forecast for 2012. The IEA made it clear that expectations of ‘business-as-usual’ 4.5-5% global GDP growth were unsustainable. It cut […]
China’s Long-term Shift In Inflation
By John Richardson THE odd chemicals trader who has gone long might well seek to talk-up his or her markets by claiming that the slowdown in China’s inflation rate is great news. But nobody interested in anything beyond the sale of the next cargo should read anything too-positive into the decline in consumer inflation in August […]
This Is Not Merely A Rough Patch
By John Richardson IT was interesting to read late last week about how certain chemicals analysts still believe that the big slump in the sector’s share prices might merely be a rough patch, possibly just a correction. In this same excellent piece from my colleague Nigel Davis, Citi US chemicals analyst PJ Jukevar talks about how […]
Demand Weakness Dominates
By John Richardson A CAREFUL reading of all the major ICIS pricing reports covering olefins, polyolefins, aromatics and their derivatives over the last few weeks reveals very few mentions of the phrase “peak demand season”. This time last year, the reports were full of references to the seasonal surge in production of finished goods in […]
There Is No Going Back
By John Richardson “IF we build polymer capacity in India the demand will come,” a very senior industry executive told the blog last year. He amplified this statement by explaining that greater availability of plastics would always stimulate strong demand growth for low-end packaging materials etc in emerging markets in general, as the poor became […]
September Will Be A Cruel Month
By John Richardson SEPTEMBER is going to be a cruel month when the West returns from the summer holiday period and the extent of damage to chemicals and polymer demand becomes more apparent. In Asia, temporary supply constraints in polyolefins, paraxylene (PX) and styrene monomer (SM) have disguised the damage. These constraints will at some point ease, leading […]
China Inflation Pressure Mounts
By Malini Hariharan The Chinese government’s efforts to control inflation are showing no signs of yielding results. The National Development and Reform Commission (NDRC) admitted yesterday that the government was finding it difficult to achieve its full-year inflation target of below 4%. It cited high global commodity prices as a major factor driving up local production […]
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