By John Richardson MOST people now accept that China’s real estate sector, worth some 29% of the country’s GDP, is deflating with significant long-term implications for petrochemicals growth. But because China’s GDP growth is very likely to still grow and because China’ existing demand is already so big the common view is that there is […]
Asian Chemical Connections
European and US LLDPE margins may in 2022 sink towards northeast Asian levels
By John Richardson A GOOD FRIEND and contact messaged me this week to say, “Wow, this is complicated”. Yes, I am afraid so. These are the most difficult-to-read polyolefins markets I can recall in my 25 years of following the industry. I don’t see forecasting outcomes for this year becoming any easier. But, using linear […]
China PP in 2022: either 3.6m tonnes net imports or 500,000 tonnes net exports!!
By John Richardson AGAIN, PLEASE DON’T SAY I DIDN’T WARN YOU. Regular readers of the blog will not be surprised in the slightest by the chart below. This is the first time northeast Asian (NEA) naphtha-based polypropylene (PP) margins have turned negative since we began our margin assessments in January 2014. Propane dehydrogenation-based NEA PP […]
China HDPE negative 2021 growth, declining imports underline need for new business model
By John Richardson Following on from my post on Wednesday, please study the quite remarkable chart below, and, if you are not making Common Prosperity the very centrepiece of your strategic planning process, ask yourself, “Why not?”. Then please, please change direction before it’s too late. What you can see are the ICIS estimates for […]
With Common Prosperity set to dominate 2022, here is some essential history
By John Richardson THERE IS ONLY one slight problem with the argument that developing world demand is behind the boom in petrochemicals demand over the last 20 years: the data. Sorry to begin the year on a rather sarcastic note, but this is unfortunately a drum I feel I need to keep banging to support […]
Global PP market and Omicron: deflationary pressures build
By John Richardson THE OMICRON outbreak is piling further pressure on already extremely stressed supply chains as Europe struggles to cope with the highly infectious variant. As my ICIS colleague, Tom Brown, said in this ICIS Insight article, tapping into market intelligence from our pricing editors: “The supply chain pressures that have dogged the European […]
Deflation could already be here: implications for PE and PP
By John Richardson ONCE AGAIN, PLEASE don’t say I didn’t warn you. The switch from inflation to disinflation or deflation is already well underway, a lot sooner than my prediction of Q1 next year. American retailers, having spent months scaring customers with stories of shortages, were trying to lure them into stores with offers of […]
Petrochemicals health warning: beware of vanishing feedstocks
By John Richardson NEW STEAM cracker projects are still being announced on the assumption that they will still be needed 20 years and more from now – well beyond full depreciation. One could argue this is reasonable given that it took some 50 years, from the introduction of the Model T to the development of […]
China 2021 polyethylene demand could be 1.9m tonnes lower than last year
By John Richardson WE NOW HAVE enough data to make some firm conclusions about what the Chinese polyethylene (PE) market will have looked like in 2021. We can also make some early estimates about the shape of the market in 2022. The slide below details what the ICIS apparent demand data for January-October 2021 (our […]
Omicron, petchems and the developing world: we might get lucky this time, but maybe not next time
By John Richardson UNTIL ALL of us are adequately vaccinated none of us are sufficiently protected is a point I’ve been making since late last year. So, providing the developing world with the $66bn it needs to be adequately vaccinated – and we appear to be nowhere near raising that figure – would not be […]