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Asian Chemical Connections

Global inflation may matter more than China’s latest supply chain disruptions

IF THE REPORTED new problems at Yantian container port –- the third largest in the world –- had happened before 24 February, the only concern would have been further disruptions to the global container business.

Back then, I would have only worried this would have caused yet another delay to in the fall in of east-west freight rates to much more manageable levels.

Under the Old Normal, high freight rates had created a divided polyolefins world – very strong pricing and margins in Europe and the US versus comparatively very weak pricing and margins in Asia.

High container freight rates had limited the ability of Middle East and Asian producers to relieve oversupply in the dominant China market through exporting to the West. The oversupply was the result of a China demand slowdown caused by Common Prosperity and big capacity increases in China and South Korea.

But does it now even matter that much that Yantian is said by CNBC to be effectively shut down because of the coronavirus-related lockdown affecting Shenzhen –- the city of 17m people where the port is located?

Not if we are already amid a collapse in demand for Chinese exports more significant than any reductions in container-freight shipments, the result of high inflation.

Or maybe China will, as it has done in the past, subsidise its exporters to keep the China price cheap enough to sustain its export trade. There are reports of this already happening.

European polyethylene: Ukraine and the supply risks

By John Richardson SECURITY OF SUPPLY is a critical concern for European polyolefins producers and buyers because of the risks of interrupted Russian oil and gas supplies. You cannot, of course, run polyolefins plants without sufficient energy supplies. So, in order to support European readers of the blog, let me start with some headline energy […]

Ukraine-Russia: Assessing petrochemical demand losses

To follow all the breaking news on the crisis and the implications for petrochemicals and energy markets, please click here for the ICIS subscription topic page. If you need a trial of ICIS news, please let me know. By John Richardson NOW THAT an invasion has started, the critical issue for petrochemicals companies is whether they can […]

Ukraine-Russia, polyethylene and no end to history

To follow all the breaking news on the crisis and the implications for petrochemicals and energy markets, please click here for the ICIS subscription topic page. If you need a trial of ICIS news, please let me know. By John Richardson FRANCIS FUKAYAMA famously wrote about the “end of history” after the Berlin Wall came […]

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