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 […]
China phenol self-sufficiency: another one could bite the dust
By John Richardson IT IS A FANTASTIC song from a great band. Another One Bites the Dust by Queen underlines the versatility of a band that could not be pinned down. They never stuck to a genre, but instead adhered with the strength of epoxy resin-based glues to excellent song writing and performing. When analysing […]
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 could become a PP net exporter next year
By John Richardson LET’S PUT THIS in perspective. Yes, as the chart below indicates, China’s polypropylene (PP) demand growth in 2021 is in line to be disappointing relative to what I have long seen as over-bullish expectations. But, unlike in polyethylene (PE), year-on-year PP demand growth will still be positive. Over-bullish expectations are persisting into […]
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