By John Richardson EUROZONE GDP expanded 0.3% in the second quarter of this year and it will probably also have expanded in Q3. As a result, if you view the end of a recession as two consecutive quarters of positive growth, the champagne corks should perhaps be popping. Europe’s politicians have seized on the […]
Asian Chemical Connections
New Consensus Builds On Ethylene Supply Gap
By John Richardson THERE seems to be a new consensus emerging over an ethylene capacity addition shortage between 2013 and 2017. Many of the projects that are supposed to come on-stream during that period will either be delayed, or perhaps might even be cancelled, think a growing number of people. The future of some of […]
Generic Strategies No Longer Good Enough
By John Richardson DURING the economic Supercycle life was easy for chemicals companies. Strong and constant demand growth was assured and so all they had to do was focus on building new, cost-effective capacity. Top-down strategy was generic – a one-size-fits-all approach. Even if chemicals companies got the timing of new capacities slightly wrong it […]
Indonesia: Sweat It Out!
Jakarta at night (source of picture: Wikimedia) By John Richardson THE blog first visited Indonesia in October 1997, shortly after the onset of the Asian Financial Crisis, and was amazed to think that only a few months earlier, the media was talking of the inevitable rise of Indonesia’s middle class, which was said to […]
Cheaper Credit Drives Inventory Building
By John Richardson A DRAMATIC dip in the cost of short-term financing seems to further explain why China’s manufacturers have ramped-up their inventories of raw materials. When raw-material prices, including those of petrochemicals, start to rise (see the example of polyethylene above), and credit is cheaper, the instinctive response is to stock-up ahead of […]
Water Shortages to Scupper China CTO Industry
By John Richardson THE debate about how exactly how much coal-to-olefins (CTO) capacity China will add has been largely around the economics of the process versus that of naphtha cracking. In terms of capital costs, building a CTO complex costs 1.5-2 times more than constructing a naphtha cracker, according to our colleagues at CBI […]
China PE Demand Up By 13% On Environmental Concerns, Restocking
By John Richardson CHINA’S apparent demand for polyethylene (PE) surged by 13% in January-June this year (red column) compared with the same months in 2011 (blue), according to data from Global Trade Information Services. This represents a further improvement from the 10% increase in PE demand in the January-May period of 2013. “This is all […]
Only 4-6 US Cracker Projects Will Happen
By John Richardson ONLY 4-6 of all the above US cracker projects are likely to go ahead as realisation dawns that both demand and feedstock advantage might not be as strong as previously thought, an industry source told the blog. “First of all, companies need to factor into demand and supply forecasts the possibility that […]
Zero And Declining Growth For China Imports
By John Richardson CHIINA’S ethylene equivalent imports will see zero growth over the next 5-7 years and the country’s propylene equivalent import requirement will decline over the same period, says a source with a major oil, gas and petrochemicals producer. This exceptionally bearish forecast is based on lower demand growth as China undergoes major economic […]
Strong June, But Shaky Q3
By John Richardson JUNE was a good month for Asia’s polyethylene (PE) industry. Both prices and margins (see the above charts) improved as a result of a reported delay to the start-up of a new big new complex that left end-users short of inventory. “China’s converters had held back for such a long time from […]
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