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Asian Chemical Connections

China Investment Lowest Since 2002

By John Richardson THE chart above indicates the extent to which polyethylene (PE) price rises over the last few weeks have failed to adequately compensate for higher feedstock costs. Last week saw prices edge up by a further $10-40/tonne, according to ICIS pricing. “The majority of buyers have accepted higher September offers, but we know […]

China Stimulus Confusion

By John Richardson THERE was much talk last week about $158bn worth of new infrastructure projects in China that have received fast-track approval from the central government. But is this just a lot of noise to boost financial and commodity markets? Can anybody be 100 per cent certain that these projects are genuinely new, and that […]

The Best Of All Possible Worlds

Source of graph: http://www.businessspectator.com.au/    By John Richardson “Candide, the classic novel of the great French writer Voltaire, is a satirical description of a young man who has been taught that ‘everything is for the best in the best of all possible worlds’,” wrote Paul Hodges in this blog post last week. Thus, we have […]

China Exports, Rebalancing Scenarios

Source of chart: Morgan Stanley   By John Richardson CHINA might soon raise export tax rebates, as it did during the 2008-2009 global economic crisis. Some chemicals and polymers exporters to China would welcome the increase in export tax rebates (this would make re-exports of finished goods from China more competitive). But on this occasion, […]

China Textile Exports Decline

Source: http://www.economist.com/  By John Richardson RISING China labour costs are compounding weakness in the manufacturing sector and thereby, of course, damaging chemicals and polymer markets. The country’s garment exports fell by 0.2 percent in the first seven months of this year, compared with a 24 percent increase in January-July 2011, says the Association of Chinese […]

China Stockpiles Mount

Source: New York Times   By John Richardson INVENTORIES of finished goods are mounting in factories across China as manufacturers continue to run hard, according to this New York Times article – perhaps in the hope that in 3-6 months time, everything will be alright again. “My supplier’s inventory is huge because he cannot cut […]

China’s Blown Up Growth

By John Richardson CHINA’S steel production is expected to decline for the first time in 31 years during 2012. Yes, 31 years. “The end of three decades of growth in a key industry will add to hand-wringing over China’s economy,” wrote Chuin-We Yap in this Wall Street Journal blog post. “China makes half the world’s […]

PVC’s Unsustainable China Growth

By John Richardson POLYMER markets continue to tell us that China’s 2009-2010 economic stimulus programme delivered unsustainable demand growth. China’s demand for polyvinyl chloride (PVC) surged from 10.9m tonnes in 2009 to 13.2m tonnes in 2010, according to Global Trade Information Services (GTIS).  Demand then reached 14.1m tonnes in 2011. The slowdown in growth reflected government […]

Chemicals Demand Shift Will Not Be Smooth

  By John Richardson ADIDAS recently announced that it is to close its only directly-owned sportwear factory in China. Many other similar factories could shut if Beijing sticks to its 12th Five-Year-Plan (2011-2015) promise to move up the industrial value chain. The Adidas decision is driven by rising labour costs, which are partly government policy designed to […]

China PE Demand Down 3 Percent

 By John Richardson GROUND level economic conditions in China are still a lot weaker than headline GDP (gross domestic product) numbers suggest. For example, a polyvinyl chloride (PVC) sales and marketing executive said: “PVC demand growth is going to be in minus territory this year. Carbide-based producers are likely to continue to have to run […]

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