By John Richardson THE blog once asked a seasoned petrochemicals industry consultant what the price of polypropylene (PP) was. “It depends on whether the Hong Kong traders are in a good or a bad mood this morning,” was his reply. Excellent point, of course, because sentiment plays an important part in market direction – and, […]
Asian Chemical Connections
China Consumer Confidence “The Worst In 17 Years”
By John Richardson LAST year, the blog was told that business at some high-end restaurants in Beijing had fallen by as much as 90% because of the government’s crackdown on corruption. And China’s top military officials are scared to even park their cars in the vicinity of high-end restaurants in case they are accused of […]
China’s “Irrelevant” Target
By John Richardson WHEN is a target for GDP growth almost irrelevant? Perhaps this year in China, when if history is any guide, even if China genuinely hits its 7.5% growth target, chemicals demand growth could considerably undershoot this number. See the above chart for polyethylene (PE), and here is the explanation: In 2009, when China’s […]
The Future For China Auto Sales
By John Richardson The distance from end-use markets didn’t matter for chemicals and polymers producers during the 2008-2013 credit surge in China because, as we said yesterday, demand was so good that few people were willing to ask too many awkward questions. But now the questions need to be asked. One of the questions we […]
What Yuan Depreciation Means
By John Richardson THE truth is that nobody has ever entirely understood the nature of China’s chemicals and polymers demand. During the good times, at the height of China’s credit Ponzi scheme, if you were a sales manager, why ask too many questions? Sales were sales and if mono-ethylene glycol (MEG) ended up stuck in […]
China Markets And Commentators In Denial
By John Richardson SOME chemical market players remain in denial or have yet to grasp the real problem in China, as is the case with quite a few financial journalists. Here is why: A widely-held assumption is that we cannot read too much into the few sets of data that have been released so far […]
China Targets Trade Finance
By John Richardson AT the high inflation point of any financial bubble, you tend to get outlandishly dangerous and dodgy practices designed to make even more money because most people think that “this time will be different” – i.e. that the drunken party will go on forever. The US sub-prime disaster is, of course, a […]
China: More Credit For Less Growth
By John Richardson REMEMBER this time last year when a surge in credit availability occurred in China, thanks to the shadow-banking system? This helped support a pick-up in economic activity in the second half of the year, including stronger chemicals and polymers markets. What a difference a year might have made. The People’s Bank of […]
China’s About Turn: The Seven Global Implications
By John Richardson HISTORIANS will end up concluding that falling emerging market currencies and stock markets – the prelude to what could be a full-blown crisis – is really about China and not about the US Federal Reserve. The Fed is just a sideshow to the main event of what is going to drive not […]
US Housing Recovery? What Recovery?
By John Richardson A SUSTAINED US housing recovery is vital for the global petrochemicals industry because, without it, far too much of the 64% of ethylene capacity, which is due to be added in the States, will have to be exported in the form of derivatives. One of the reasons is that some $16,000 […]
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