By John Richardson JACK MA, the founder of Alibaba, said of the US/China trade war, “It’s going to last a long time, maybe 20 years. It’s going to be a mess. It’s not a trade war, it’s about competition between two countries.” I believe that the world is set to be split into two trading blocs, […]
Asian Chemical Connections
How Lehman Bros reshaped China and the global PE business
By John Richardson MOST of the analysis on the tenth anniversary of the Global Financial Crisis (GFC) focuses on the effects on Western economies and societies. Economic inequality has risen since 2008 resulting in the rise of populist politics, is a very common theme. But almost entirely overlooked is the huge effect that the GFC […]
US ethylene glycols: The Cost Of Exclusion From China
By John Richardson IF THE US were unable to export ethylene glycols (EG) to China the economic logic of US capacity expansions would face major challenges. Between 2018 and 2025, China will account for no less than 84% of global net imports (imports minus exports) amongst the major importing regions and countries. (For those who […]
US Economic Strength Of Little Benefit To Global Polyolefins
By John Richardson THE BETTER that things get in the US (provided you own equities and are not on a zero-hours contract) the worse things become in emerging markets. Despite a weaker greenback on a trade-weighted basis, the investor sell-off in emerging markets continued last Thursday, wrote Bloomberg in this article. The Lira was for […]
PE Margins Fall As Trade War Threatens Two Entirely Separate Trading Blocks
By John Richardson LET’S FIRST of all take a close look at what the above chart is telling us about the damage already done to polyethylene (PE) margins before considering what could happen next. US high-density PE (HDPE) margins are 47% lower in the year-to-date versus to 2017 and low-density (LDPE) margins are 45% lower. […]
Why Trade War Will Continue Throughout 2019 And Impact On Polyethylene
By John Richardson A MISCALCULATION by the White House could be one of several reasons why the US/China trade war continues throughout 2019 – and possibly even beyond that. This is the idea that China is losing the trade war and so will soon be forced to the negotiating table with compromises that meet American […]
US Risks Losing Access To 82% Of Global PE Consumption Growth, 80% Of Exports
By John Richardson PERHAPS this week’s low-level trade talks between the US and China shouldn’t only be judged on the basis that they are low level, involving officials of mid-level seniority who are therefore not empowered to achieve major breakthroughs. The talks on 22-23 August (23 August is when 25% Chinese polyethylene (PE) tariffs on […]
G7 Meeting And The Risks For US Polyethylene Producers
By John Richardson IN All the noise, confusion and economic anxiety following last weekend’s very acrimonious G7 meeting in Canada, you might have failed to notice one very significant detail for the polymers industry. This was the refusal by the US and Japan to sign a plastics charter put forward by Canadian Prime Minister, Justin […]
US-China Trade War: Global Recession, Collapse Of Polyethylene Markets
By John Richardson YOU have had more than 12 months to prepare for a global trade war that is becoming ever-more likely, almost by the day. This would lead to a new global recession given the shaky nature of today’s “economic recovery”. President Trump overnight Asia time announced plans for a further $100bn of tariffs […]
Global Trade War: $12.4bn of US Petchems Exports At Risk
By John Richardson THE CUMULATIVE negative effect on global GDP as more and more countries became involved in a trade war is estimated by the above table on the left, from a research paper by economists as the Australian National University. The table shows the impact of each country imposing an extra 10% tariffs on […]
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