By John Richardson Word for word, see below what an Asian polyolefins trader told us yesterday: “This year has been absolutely terrible, the worst I can remember in eight years in this business, and even worse than 2008. There is just no demand out there. “There was supposed to be a recovery after the Chinese […]
Asian Chemical Connections
Consensus Misses The Point
By John Richardson The consensus view on China remains that we have reached, or are near, the bottom of the decline in GDP (gross domestic product) growth. This was how yesterday’s release of the preliminary HSBC China Manufacturing Purchasing Managers Index for April was interpreted. Although the index contracted for the sixth month in a […]
China’s Changing Demand
By John Richardson THE nature of demand in China is changing, despite the belief among some chemicals analysts, and companies, that everything will soon return to normal. Here is a summary of our key arguments. Please print off and pin to your office, or boardroom, wall for discussion – and let us know if you […]
The H2 Recovery Story
By John Richardson THE majority of chemicals analysts have yet to wake up and smell the coffee, according to an industry observer. “South Korean stocks have come off by 15-30% since their big recovery in January, but it is only the timing rather than the overall sentiment that has changed,” said the observer. “The theory […]
China Urbanisation Complications
By John Richardson EVERY time you come back to the subject of China, it becomes ever-more complex and uncertain. An excellent example is an article published in the academic journal, Eurasian Geography and Economics, in February, by University of Washington professor Kam Wing Chan. It questions to what extent China’s economy will benefit from further […]
Costly Oil Hurts US Industry
By John Richardson THE higher that oil prices go the more the US petrochemical industry’s margins have expanded. Petrochemical prices are oil-driven and, therefore, have to go higher as crude becomes more expensive, whereas the cost of shale gas-based ethane keeps on falling due to rising supply. US petrochemical producers are cracking increasing amounts of […]
Chems Trade Finance Threat
By John Richardson NEW banking regulations could severely restrict the ability of small and medium-sized (SMEs) companies to access trade finance. This would hit Asia particularly hard, as the majority of chemicals and polymer business involves SMEs. Under the Basel III regulations, due to be phased in from next year, a three-month trade finance loan will […]
China Economic Optimism
By John Richardson ECONOMISTS think China’s growth has bottomed out, thanks to unexpectedly strong March bank lending. They also think that interest rates will stay low for a long time, even if rates cannot be cut because of the inflation problem. New loans in March totalled Rmb1trn ($159bn), more than banking analysts had expected. This renewed […]
US Euphoria
By John Richardson THE shale gas advantage, along with the revival of the US economy, made for a euphoric atmosphere at last week’s International Petrochemicals Conference (IPC)* in San Antonio, Texas. China was only a blip on the corner of the radar screen because the talk was so domestic-focused. The only doubts expressed were over […]
Foxconn And Chemicals
By John Richardson THE recent investigation by the US-based Fair Labor Association into Foxconn is a further indication of how China is transforming its economic model. It was found that Foxconn breached several Chinese regulations, including a maximum working week of 49 hours. The company is China’s biggest private-sector employer and manufactures 40 percent of […]
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