By John Richardson IF THE US had the same income distribution it had in 1979, the bottom 80% of the population would have $1 trillion -or $11,000 per family – more. The top 1% $1 trillion – $750,000 tonnes – less, according to this FT article by Lawrence Summers. From a dollars and cents perspective […]
Asian Chemical Connections
A brand new ‘how to” guide for forecasting Chinese polyethylene demand
By John Richardson TIME and again over the last ten years the strength or weakness of Chinese chemicals and polymers demand has taken everyone by surprise. One method of analysis that does hold considerable value as a methodology for forecasting growth might be predictions of future credit flows for some chemicals. The big uptick in […]
China chemicals storage at bursting point indicates no big new economic stimulus
By John Richardson CHEMICALS markets are a great barometer for weather conditions in the wider economy because they are upstream of so many manufacturing industries. We should therefore take close notice of the above chart, from this excellent article by my ICIS colleague, Yvonne Shi. What the chart shows is that by mid-March, weekly inventory […]
China’s vital internet economy cannot be sacrificed for trade deal
By John Richardson THE latest stumbling block for the US/China trade talks is the Chinese reluctance to open up its market to foreign cloud computing companies, curb requirements for companies to store data locally and loosen restrictions on the transfer of data overseas. Many people’s first reaction will be that this is all about the […]
Growth in China second hand car market driven by ageing population
By John Richardson CHINA will become a country of a billion plus Western-style middle class consumers is what many people have been telling us for many years. Its unstoppable economic rise involves hundreds of millions more Chinese rising out of poverty as the economic boom moves steadily westwards into its poorer regions, is the popular […]
Per capita consumption another blunt tool for predicting China polymers growth
By John Richardson WE ALREADY know that forecasting Chinese polyethylene (PE) demand growth based on multiples of GDP doesn’t work. This is almost certainly the case with all the other polymers. As discussed last week, the problem starts with the forecasts for GDP growth. They will be inflated for political reasons. A new Brookings Institution […]
China polyethylene demand forecasting: Forget GDP, look downstream and focus on regions
By John Richardson THE TOP DOWN method of estimating polyethylene (PE) demand growth in China that uses multiples over GDP seems to have major weaknesses (and some of what follows may apply to other chemicals and polymers). The problem is with GDP itself. China’s actual and forecast official GDP growth numbers have long been understood […]
China’s ageing population could cost 240 million tonnes of polymers demand
By John Richardson THERE was nothing miraculous about the “Chinese economic miracle”. What instead happened was a lucky coincidence of economic reforms and lots and lots of babies. The reforms were led by Deng Xiaoping who in 1978 decided to open up the Chinese economy. But the opening up would not have delivered significant benefits […]
Surge in China lending could lead to global economic rebound, stronger chemicals demand
By John Richardson CHINA may have pressed the panic button again. If the extraordinary rise in January lending is sustained, this would represent the third time in recent history that China has opened the floodgates on new credit. A sustained upswing in lending would obviously result in stronger chemicals pricing, margins and demand. Further upward […]
Search for votes in 2020 US presidential battleground states may wreck trade deal
By John Richardson A GOOD WAY of deciding whether or not the likely US/China trade deal will hold is to take a close look at the demographics in 15 potential battleground states in the 2020 presidential election. As of 2016, just ahead of the last presidential poll, David Wasserman of the Cook Political Report estimated […]