Note that all the comparisons in this post are on a year-on-year basis unless otherwise stated By John Richardson THE ABOVE chart, completing my analysis of supply and demand for China’s major petrochemicals and polymers in January-July, seems to indicate nothing much to be concerned about. If only the future were the same. What you […]
Asian Chemical Connections
The China polyester mystery continues in a world turned upside down
By John Richardson SOMETHING very strange is happening in China’s polyester industry which has enormous implications for the global industry, as ICIS data continue to point towards strong local apparent demand growth for paraxylene (PX) and monoethylene glycols (MEG) despite seemingly weak downstream fundamentals. The world “enormous” is no hyperbole because China completely dominates exports […]
Pandemic and the developing world: No quick and easy solutions
By John Richardson POVERTY alleviation in low-income developing countries could be set back a decade by the pandemic, warns the IMF in a new study. Problems it highlights include the collapse of remittance payments from overseas, down by 18% year-on-year in Bangladesh in January-May, lockdowns that have left workers living on the margin unable to […]
The pandemic and petrochemicals demand: a whole new approach is required
By John Richardson MONITORING demand has never been harder because of the pandemic. One of my colleagues on the ICIS Pricing team was, for example, last week told by one of his reliable contacts that polyethylene (PE) demand was good, bad or indifferent. It used to be that if you talked to the people you […]
China’s limited policy options to help lower-paid workers make 2020 retail sales recovery unlikely
All the data comparisons below are on a year-on-year basis By John Richardson AS I’VE been flagging up for the last six weeks, China’s economic recovery has been driven by higher petrochemicals production and imports, along with an overall pick-up in manufacturing, rather than a big improvement in end-use demand. This was further underlined last […]
Why history might not even rhyme next year if economic recovery fails to arrive
By John Richardson WE were very lucky in 2010, as the above chart illustrates. Global demand for polyethylene (PE), which had fallen to minus 3% in 2008 because of the Global Financial Crisis, bounced back to 10% growth. We were lucky for two reasons. Firstly, the world’s financial system was rescued, which at one stage […]
Vaccine hopes versus reality and the implications for petrochemicals
By John Richardson THE WONDERFUL poet, T.S. Eliot, wrote “humankind cannot bear very much reality”. One of the realities that I believe many us have failed to come to terms with is that an effective coronavirus vaccine isn’t just a few months away, but is instead several years away. I believe we will eventually get […]
China polyolefins market H1 review: so far so good, but beware of the risks ahead
By John Richardson ALL looks fine in the polyolefins world. The Old Normal appears to have reasserted itself as Chinese demand has come roaring back. (Note that all the following numbers are on a year-on-year basis unless otherwise stated.) H1 2020 data shows that polyethylene (PE) apparent demand (net imports plus local production) grew by […]
Polyethylene market recovery could be threatened by slower China crude buying, weaker economic growth
By John Richardson EVEN by China’s standards, where just about every number is eye-wateringly large, the data on oil imports during the first seven months of this year is quite extraordinary. Reuters writes: July seaborne arrivals into the world’s biggest oil importer are expected to surge to 14.4m bbl/day, Refinitiv analyst Emma Li said, well […]
Why the polypropylene industry must switch from volumes to value
By John Richardson EVERYONE knows about the oversupply in the polyethylene (PE) market as it has been discussed in more presentations and conferences than any of have had hot dinners. But less understood is the extent of oversupply in the global polypropylene (PP) business, which you can see from the above chart on the left. […]