By John Richardson A GOOD chart can quite often by worth many thousands of words with the above chart serving as an excellent example. You can see how in June, scheduled and unscheduled shutdowns of Asia-Pacific ethylene capacity exceeded 6.3m tonnes – the biggest total by far since at least 2011. Markets have been further […]
Asian Chemical Connections
How China Will Narrow Its Income Gap
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 […]
Ten Reasons To Plan For A Difficult H2
By John Richardson LACK of clear thinking about the challenges ahead worries me at the moment. I am concerned that petrochemicals companies, because of the strong profitability they have enjoyed so far this year, might well not be adequately prepared for the fault lines opening up the global economy. Here are ten themes that you […]
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 […]
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 […]
Pump Oil Hard Now Or Live To Regret Production Cuts
By John Richardson OIL producers face a very straightforward choice: Pump crude as hard as possible right now or run the risk of your most important economic asset being left in the ground for good. One of the reasons is that, regardless of what you might think about the science behind claims that burning fossil […]
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 […]
Oil Prices, The Chase For Yield And Another Roll Of The Dice
By John Richardson GILLIAN Tett, the outstanding financial journalist, talked about “silo thinking” in her book – Fool’s Gold – that detailed the root causes of the Global Financial Crisis. By this she meant how too many people only had deep knowledge of one particular aspect of how financial markets were supposed to work – […]
The Developing World: Getting Your Strategy Right
By John Richardson IT IS just plain intellectually lazy, and, more importantly, very wrong indeed: You work for a petrochemicals company and have been asked by your boss to come up with a demand-growth estimate for the next ten years for the rest of the developing world, and so you look at what’s happened in […]
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