By John Richardson THE above chart is part of China’s New Normal, and so helps us to understand the future of the country’s chemicals and polymers supply and demand balances. As you can see, the gap between its richest and poorest provinces remains substantial despite some progress in narrowing this gap since 2002. The success […]
Asian Chemical Connections
Good Luck Isn’t The Same As Good Planning
By John Richardson The tail has long wagged the dog in Asia’s polyethylene (PE) market. Whilst the spot merchant ethylene market accounts for only around 5% of the total amount of ethylene that is produced in the region, ethylene spot prices drive polyethylene (PE) spot prices – with just about everyone buying and selling PE […]
Oil, Gas,Chemicals: A Trove Of Financially Toxic Assets
By John Richardson OIL and gas companies might very well find themselves holding on to what Izabella Kaminska of the FT has aptly called “a trove of financially toxic assets” as a result of the growing, and irreversible, consensus that climate change is man-made. She was basing her phrase on the work of the consultancy, […]
Pricing Climate Change Into Import Tariffs
By John Richardson SO, following on from my blog post yesterday, how might developing countries calculate import tariffs on petrochemicals in response to the rising social, political and economic costs of climate change? One good starting point in just a few years’ time, when these tariffs are sure to be under serious evaluation, might be […]
Trade Flows In A Low Carbon World
By John Richardson YOU will have no doubt seen many charts similar to the one above, which shows lots of arrows indicating the direction of global petrochemicals trade flows – in this example, polyethylene (PE). The actual numbers, are, of course, missing from beneath each of these arrows, but if you are interested, you can […]
Peak Oil? Yes, Absolutely – Peak Oil Demand
By John Richardson YOU should never bet against the capability of oil investors to turn the world completely upside down. A great example occurred on Wednesday of last week, as Arthur Berman argues in this excellent Oilprice.com article. He points out that Brent crude surged from $62 a barrel to $65 a barrel on 10 […]
Spend Your Supply-Driven Profits On Managing Demand
By John Richardson IT has been a fantastic few months for Asia’s naphtha cracker industry as the above chart further illustrates. Even in the case of poor old, very heavily commoditised raffia-grade polypropylene (PP), variable cost margins so far this year for integrated naphtha-based players have averaged $389/tonne. The story is even better for low-density […]
US Oil, Gas, Chemicals Drowning In Excess Of Credit
By John Richardson THE US oil, gas and petrochemicals sectors are drowning in an excess of credit that has distorted rational analysis of long-term supply and demand fundamentals. So, just as is the case with China manufacturing in general, these misguided investments are in danger of contributing to a prolonged period of global deflation. Let’s […]
More Evidence That US Shale Oil Is The New “Swing Producer”
By John Richardson SICK today with a bad cold – hence this very short post. Will, hopefully, be back in full action, though, later today or tomorow Meanwhile, here is some more background reading, which underlines myy argument that shale oil has become the new “swing producer”. It is also all good see the constant […]
Your Seven-Point Guide To H2 2015 Oil Prices
By John Richardson BEFORE you get carried away with the wholly misguided notion that we have entered into a “new normal” of oil prices in the region of $60-80 a barrel for the rest of this year, see below for a further and updated guide to why this kind of thinking is very, very dangerous. […]
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