By John Richardson ONE OF THE useful things about chemicals industry data is that they are an early indicator of macroeconomic trends because chemicals are of course the raw materials for so many finished goods. If demand for chemicals rises this serves as an early indicator of stronger sales of TVs, smartphones, autos, computers and […]
Asian Chemical Connections
Negative Asian polyolefins margins show need for recession planning
ASIAN PE and PP spreads turned negative in October this year for the first time since the same month five years earlier. As spreads turned negative it seems certain that margins would have been in deeper negative territory as spreads don’t account for the full costs of production. Back in October 2014 the sharp fall […]
President Trump’s “very good” call with President Xi: Nothing changes
PRESIDENT TRUMP said yesterday that his discussions with President Xi Jinping were “moving along nicely” following a “very good” telephone call ahead of their critical G20 meeting at the end of November. But on the same day that the US president made his comment, the US Justice Department issued indictments against Chinese and Taiwanese semiconductor companies over […]
Global recession approaches as chems data weakens, debt problems build
THE CHEMICALS industry is the “industry of industries” – upstream of all the manufacturing chains. This is why what is happening in chemicals serves as such an important early indicator. Take a look at the above chart – the latest from the American Chemistry Council. It shows that during September, capacity utilisation in the global […]
US equities risk following China as global debt bubble unwinds
THE CENTRAL character of The Big Short was the only person who bothered to read the detail of US mortgage debt securities that were at the heart of the Global Financial Crisis. All of us course now know that these securities were built on sub-prime debt that went wrong and almost caused the collapse of the global […]
China and the end-game of the global credit bubble
WHEN stock markets are rising it makes sense to fund your investments through margin debt. Over the last ten years in particular, this approach has produced stellar results because of the abundance of cheap and easy finance. But the above chart is an example of what can happen when lending tightens and demand for margin […]
US LLDPE needs 68% export growth next year to top five markets…..
…..and that’s assuming there is no trade war with China! By John Richardson THE MORE you dig into the data the more it seems that the US might struggle to find a comfortable home for all of its new polyethylene (PE) production, even without a trade war with China. Using linear low-density PE (LLDPE) as […]
US styrene another petchems sector at risk from trade war
By John Richardson THE US decision to pick a fight with China over trade and geopolitical influence could backfire very badly from the perspective of new US investments in petrochemicals capacity – most notably polyethylene (PE) and ethylene glycols (EG). The data tell is that many billions of dollars of investments in new plants will […]
Middle East, India, SEA petchems winners in new trading blocs
By John Richardson JACK MA, the founder of Alibaba, said of the US/China trade war, “It’s going to last a long time, maybe 20 years. It’s going to be a mess. It’s not a trade war, it’s about competition between two countries.” I believe that the world is set to be split into two trading blocs, […]
How Lehman Bros reshaped China and the global PE business
By John Richardson MOST of the analysis on the tenth anniversary of the Global Financial Crisis (GFC) focuses on the effects on Western economies and societies. Economic inequality has risen since 2008 resulting in the rise of populist politics, is a very common theme. But almost entirely overlooked is the huge effect that the GFC […]
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