By John Richardson THERE is a lingering, and, I think, potentially damaging belief out there that this is just a particularly bad oil-driven destocking process and that very soon, China’s buyers will pretty much flood back into the polyethylene (PE) market. In emails and telephone calls this week, most of the market participants I spoke […]
Asian Chemical Connections
The New Global Financial Crisis: Emerging Market Bonds
By John Richardson EXACTLY how the new global financial crisis will gather momentum is becoming clearer by the day. Greatly adding to this clarity was the latest Bank for International Settlements (BIS) quarterly report, which was released earlier this week. The BIS warned that: Off-shore lending in US dollars had soared to $9 trillion, and, […]
Global Polyethylene: A Painful Balancing Act
By John Richardson HERE are a few important facts about polyethylene (PE): China accounted for 30%, or 2.35m tonnes , of global imports of linear low-density PE (LLDPE) in 2013 (see the above chart). It accounted for 43% of high-density (HDPE) imports. This represented 4.73m tonnes of shipments to China. And in the case of […]
US Petrochemicals: The Way Forward
By John Richardson ANYBODY out there prepared to make a guess? How long are these fantastic earnings for US petrochemicals companies in the key polyolefins space going to last? Six months, 12 months, 18 months or perhaps even longer? The question then becomes how financial analysts, investors, stock markets and therefore companies will respond when […]
China Capacity Closures? Stop Whistling In The Dark
By John Richardson Measured in US dollars, the price of US imports from China has risen just by 4% over the last ten years, but measured in Yuan, it has actually fallen by no less than 20% (see our above chart). What does this tell us? It tells us that: China, following its accession to […]
Finding A Home For US Polyethylene Expansions
By John Richardson EVEN if you take a benign view of the future of the US economy (which, separately, we think is the wrong view), the planned increases in US polyethylene (PE) capacity still raise this very important question: Where on earth will all of this stuff go? The chart above illustrates our assessment of […]
The “Why” Behind Sinopec’s Investment Freeze
By John Richardson SINOPEC has announced that it will halt some of its new petrochemicals investments. This could involve the postponement of up to three cracker projects with a combined ethylene capacity of 2.8m tonnes/year, according to this excellent story from my ICIS colleague, Fanny Zhang. The company confirmed that the 1m tonnes/year Qingdao Petrochemical […]
Europe’s Dinosaur Destiny
By John Richardson DINOSAURS became extinct, scientists think, because of an event beyond their control – either an asteroid colliding with the earth, volcanic activity, an ice age, disease or gradual climate change. With all due respect to the former inhabitants of our planet, they were not the brightest of species. Thus, even if they […]
US Shale Gas And Income Distribution
By John Richardson THE US shale gas and tight oil-driven energy revolution offers fantastic economic opportunities. Kevin Swift, Chief Economist and Managing Director of the American Chemistry Council, provided a comprehensive and very valuable summary of the opportunities during his speech at the 2nd ICIS Pan American Phenol-Acetone Conference, which took place in Houston, Texas, […]
Dow Chemical And Back To The Future
By John Richardson HOW the world has changed. Dan Loeb of the Hedge fund, Third Point, wrote in a letter proposing a spin-off of Dow Chemical’s petrochemicals assets: “We suspect that Dow’s push downstream has led the company to use its upstream assets to subsidise certain downstream derivatives, either by sacrificing operational efficiency or making […]
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