By John Richardson CHINA is heading for another good year of PE demand growth with estimates from several players of growth at around of 8%. This is in line with our forecast for 2019 growth of 7.7%. But this is clearly not a market growing at 13%, which is what our estimates of local production […]
Asian Chemical Connections
Global PE market to remain long despite Saudi cutbacks caused by drone attack
By John Richardson TRADERS lucky enough to be holding long positions in PE ahead of the 14 September drone attack on Saudi oil and gas facilities want everyone to believe that this has changed everything. They will tell you over and over again, if you’re prepared to listen, that the resulting reduction in ethane supply […]
China economic stimulus and PP: How global demand could have been 71m tonnes smaller
By John Richardson CHINA came to the rescue of the global economy in 2009. This wasn’t for altruistic reasons as a government study said that unless a huge stimulus programme was launched, 20m Chinese workers would return to the coastal cities from inland China after the Lunar New Year in 2009 without jobs. This would […]
How sustainability will upend the petrochemicals cost curve, creating new winners and losers
By John Richardson THE FUTURE I described on Wednesday, of declining petrochemicals and polymers demand growth as the Millennials reshape consumer markets, is only doom and gloom if you let it be doom and gloom. This represents a fantastic opportunity for companies in our industry to entirely reshape their strategies and emerge as winners. Gone […]
China trade war duties on US LDPE “very likely” as global recession concerns grow
By John Richardson IT IS very likely that China will impose 25% additional imports duties on LDPE in response to the latest US escalation of the trade war, market sources have told me this week. This would add to the 25% duties that have been in place on US HDPE and LLDPE cargoes since August […]
US LLDPE imports and the impact on European petrochemicals
By John Richardson EUROPEAN linear-low density polyethylene (LLDPE) markets have yet to feel the full effect of the big increase in US production in 2019. One of the reasons is that some Middle East material that should have gone to Europe was diverted to China in January-April. Netbacks to China were stronger because Chinese […]
Southeast Asia PE spreads further underline weak demand, but trade talks promise rebound
By John Richardson THE GOOD news today is that the US and China have agreed to resume trade talks. Presidents Trump and Xi are also scheduled to meet at the G20 meeting in Osaka, Japan, on Saturday – 29 June – to discuss the trade dispute. If a trade deal is done, or at the […]
Environmental credits separate polymer Winners and Losers as the world divides
By John Richardson THE WORLD is becoming a much more complex and fragmented place as the consensus about the benefits of open markets and the largely unrestricted movement of labour is challenged. There also seems to be a split between those individuals and governments that agree with the science supporting human-made climate change versus those […]
Symptoms worsen for Dr Benzene and China economy as trade war accelerates
By John Richardson THE ABOVE chart is again telling us something very important about the real state of the Chinese economy. It shows Northeast Asian (NEA) benzene pricing spreads over naphtha feedstock costs, (NEA pricing is in effect a China price as of course China dominates the NEA region). Dr Benzene, as with Dr Copper, […]
China PE spreads at seven-year low indicates too many eggs in one basket
By John Richardson CHINA polyethylene (PE) spreads over naphtha feedstock costs are at a seven-year low and I believe that spreads will continue to decline to below their 2012 levels –a year which marked the last major industry profitability downturn (see the above chart). You might want to argue that this has to do with […]