By John Richardson AFTER a very challenging first quarter, nobody wants to make further write-downs on the value of raw materials and finished-product inventories. But this is the risk for any polyethylene (PE) producer who believes the recent rallies in equity markets and oil prices are leading indicators for the strength of the real economy. […]
Asian Chemical Connections
Coronavirus, impact on the developing world and the scale of demand losses
By John Richardson ALL OF us are struggling to come to terms with a collapse in the global economy that is poised to be worse than the Great Depression – in Britain’s case its deepest recession since the “Great Frost” of 1709. In the US, Wall Street analysts expect the US unemployment rate to still […]
Coronavirus, reshoring and the polyester industry: Good luck with that
By John Richardson POLITICIANS, not just including the Populist variety, are talking a lot about reshoring or bringing back home manufacturing supply chains in response to the coronavirus pandemic. This is partly because China’s shutdown of its manufacturing capacity in February and early March made legislators wake up to the world’s heavy reliance on China […]
Beware of the fragile nature of the oil and petrochemical price recovery
By John Richardson RECENT rises in oil and petrochemicals prices should not in my view be taken as a signal that the worst phase of the coronavirus crisis is over. Please, please be careful out there. The extent of the rebound in crude should be a cause for concern given the state of supply and […]
Further polyethylene rate cuts seem inevitable with no certainty on who will blink first
By John Richardson IT IS NOT just a razor-like focus on petrochemicals demand that will get you through the crisis. Also essential is an equally close focus on production in a world where all the old assumptions about winners and losers have been turned upside down. But, as with demand, monitoring and forecasting production has […]
What petrochemical companies must do to adapt to a smaller coronavirus economy
By John Richardson PETROCHEMICAL companies can adapt to the coronavirus New Normal by running their businesses to suit what The Economist describes as the 90% global economy. The lost 10% of economic activity will be the result of social distancing, lost incomes, lost wealth and changes in consumer behaviour, says the magazine. Maybe it will […]
Coronavirus and the way forward: Forecasting micro surges in petrochemicals demand
By John Richardson THE MONTH of May is normally a low season for toluene di-isocyanate (TDI) demand in Europe because of reduced consumption of goods such as sofas and beds filled with flexible foams made from TDI. Perhaps not this year. There are reports from our market editors of long queues outside some furniture stores […]
Why Asia may win and the US lose in post-virus petchems investment world
As always, these are my personal views and don’t reflect the views of ICIS By John Richardson IT IS A polyethylene (PE) world turned upside down which, in my view, will remain upside down. With oil prices set to stay around $30/bbl over the long term, the US ethane advantage is in my opinion pretty […]
Coronavirus may have made China province-level petchems data even more important
By John Richardson WHEN THE coronavirus crisis first hit China most of the focus was of course on Hubei province – the epicentre of the outbreak. One of the immediate effects was the collapse of petrochemical, automobile, steel, food processing and textiles production – the province’s biggest industries. Wind the clock forward to last week […]
China recovery appears to lose steam as PE and PP self-sufficiency increases
By John Richardson DON’T SAY I did not warn you. The post-coronavirus recovery in China is already losing steam in April after a rebound in activity in March, according to this Bloomberg article. Domestic consumer sentiment is weak and export orders have collapsed as a result of the global pandemic, according to the wire service, […]