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Asian Chemical Connections

US Petrochemicals Will Suffer From “The Blame Game”

  By John Richardson THE chat below provides some very instructive reading as it shows that: Since 2000, overall real consumption in US polyethylene (PE) has fallen from around 12.5m tonnes to 12.3m tonnes (real consumption is domestic production plus imports, and then minus exports, with end-year adjustments made for any inventory distortions). Low-density PE […]

US Polyethylene’s Weak Pricing Power

By John Richardson HERE is the thing: Petrochemicals pricing for just about every product in every region is usually pretty much set by crude oil and yet in the US, the correlation between polyethylene (PE) pricing and oil has been just 32% since 2010, according to Wells Fargo analyst Frank Mitsch. An ICIS analysis for […]

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 […]

Ten Reasons Why US Petrochemicals Should Think Again

By John Richardson IT is incredibly hard to “stare a gift horse in the mouth” when your share options have soared in value and you annual bonuses, based on your company’s record-breaking profitability, have been nothing short of fantastic for the last few years. Why on earth, also, even bother to rock the boat when […]

European Petrochemicals: Making Money Despite Deflation

By John Richardson THE European petrochemicals industry has done staggeringly well since 2008 thanks to operating rate discipline, skillful inventory management and feedstock flexibility – for example, the INEOS and SABIC initiatives to import low cost ethane from the US. And in 2014, the region’s cracker operators have even been able to increase average operating […]

China Coal-To-Olefins “A Net Water Producer”

By John Richardson IT has become the accepted wisdom over the last few years that the coal-to-olefins (CTO) process in China consumes a lot of water. This theory has been expressed in so many conference papers and in research papers that this “truism” is part of just about every discussion on the viability of CTO […]

China’s Polyolefins Supply Surge: The Bigger Picture

By John Richardson ON paper, the polyolefins supply surge in China during 2014 is huge as it involves: Some 2.2m tonnes/year of new  polyethylene (PE) capacity, according to this ICIS news article. No less than 4.1m tonnes/year of new polypropylene (PP) capacity. To put this into context, China’s total effective capacity was estimated by ICIS […]

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 […]

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