By John Richardson IF you are a politician in the West, one approach to today’s crisis of global industrial overcapacity is heap most of the blame on China and threaten China with trade barriers. But if China doesn’t respond to your rhetoric, the problem is that you might be forced to follow through by actually […]
Asian Chemical Connections
Asian Polyethylene: Challenge The New Paradigm
By John Richardson IT would be very interesting to go back to 2000 and compare the strength of positive sentiment towards the future of the Asian polyethylene (PE) industry to the above chart. The chart shows spreads between naphtha costs, which is the main feedstock for making PE in Asia, and the prices for one […]
Oil Storage, China Credit Threaten Crude-Price Rally
By John Richardson MANAGE your naphtha and other raw material inventories incredibly carefully over the next few months, as you cannot afford to believe the hype that oil prices have definitively, without doubt, bottomed out. This has to be the only sensible approach for petrochemicals companies, given that: The hedge funds and pension funds poured […]
Chemicals Companies Need Security Of Demand
By John Richardson MUCH of the focus of last week’s Asia Petrochemical Industry Conference (APIC) in Singapore once again seemed to be about feedstock advantage. This included several charts ranking the competitiveness of the three major categories of ethylene producers – naphtha-based, ethane-based and coal-based – in low, medium and high future oil price scenarios. This has […]
The Dollar, Yen and Euro Battle: Implications For Crude Oil
By John Richardson STILL don’t buy the argument of the role of central bank money in distorting the oil prices, which I made last Friday when I argued that is more of this cheap money that is behind today’s oil price rally? Then also consider the role of currencies in all of this. Hedge funds […]
Oil Prices: You Must Answer The Supercycle Argument
By John Richardson THE continuing failure of genuine price discovery in oil markets was perfectly summarised by the the Wall Street Journal today, when it wrote: Commodity hedge funds added $4.1 billion in the first quarter, their best quarter in more than six years, eVestment said Monday. That trend is still supporting oil prices now, giving […]
European Polyolefins: Rebuilding The Bridges
By John Richardson SHOULD any petrochemicals value chain be a zero-sum game – a constant battle between suppliers and customers to determine who emerges as the single winner in any one month or quarter? No, absolutely not. It is possible to create win-win situations for both suppliers and customers, as has been the case […]
The Doha Oil Meeting: Were You Ahead Of The Curve?
By John Richardson IT WAS tremendous whilst it lasted for the hedge funds and will have enabled them to make a lot of money – the ones who, of course, had the good sense to switch from long to short positions ahead of yesterday’s failed Doha meeting. Chemicals companies with a decent planning department should […]
Beware Of Oil-Price Rally: Nothing To Do With Fundamentals
By John Richardson PEOPLE are once again at risk of dangerously over-exposing themselves to a further collapse in oil prices following yesterday’s increase to the highest levels since November 2015. The obvious risk is that there will be stock building up and down all the petrochemicals values chains, only for oil to once again decline […]
Saudi Arabia, Refining And The Battle for Crude Market Share
By John Richardson SAUDI ARABIA is determined to win its battle for greater market share of the global oil market, and at the same add value downstream to its hydrocarbon reserves. This is the consistent message I have picked over the last 18 months. And so a report in the Financial Times that Saudi Aramco […]
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