By John Richardson THE US economy is in a debt-induced bubble that will sooner or later burst with of course major negative consequences for the rest of the world. You cannot print babies. The huge amounts of money that the US Federal Reserve has pumped into the US economy since 2008 combined with last year’s […]
Asian Chemical Connections
Polyethylene versus polypropylene: Expect the unexpected
By John Richardson IT IS supposed to be a tale of two polymers with these very different fortunes: Whereas our base case assumes that global polypropylene (PP) operating rates will average a healthy 89% in 2018-2025, we see polyethylene (PE) capacity utilisation at 83%. The higher the operating the stronger the profitability. The PP industry […]
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 […]
China tariffs: Quantifying The Impact On US Petchems And Energy
By John Richardson PRESIDENT Trump believes he is winning the trade war with China because of the much greater strength of US stock markets versus their Chinese counterparts. At the start of last week, for example, the two major Chinese indexes had lost a quarter of their value since the start of the year whereas […]
China 25% Tariffs On US PE Imports Extended To All HDPE, Nearly All LLDPE
By John Richardson CHINA has extended its 25% import tariffs on US polyethylene (PE) to include all grades of high-density polyethylene (HDPE) that it imported in 2017 and 93% of the grades of linear-low density PE (LLDPE) that it imported in that same year. Also affected, as you can see from the above table, are […]
China’s Latest Threat Of US Methanol Tariff Perfectly Targeted
By John Richardson CHINA crunches exactly the same data as the rest of us, as I warned on Friday when discussing polyethylene (PE). China’s government is very aware of the dominant role China plays in global energy, petrochemicals and polymers markets. In many energy and petchems products, no other country or region comes close to being […]
Polyethylene: Damage From Trade War Should Not Be Underestimated
By John Richardson THE argument that the US-China trade war will have a minimal impact on the global polyethylene (PE) business is based on two assumptions, both of which I will argue could easily prove to be wrong. Firstly, some commentators quite rightly point out that the proposed Chinese tariffs on US PE exports only […]
Increasing Risks Of Financial Crisis By End-Year
A sign that the central bank “put option” has come to an end By John Richardson EVER since 2008 there has been been a fantastic “put option” which has made the fortunes of many financial and commodity market investors. This involved assuming that every time bad economic news emerged, central banks would ramp-up economic stimulus. […]
Six More Years Of America First: Implications For Global Petchems
By John Richardson DESPITE all the criticism surrounding President Trump’s handling of the Helsinki summit, 79% of Republican voters said that they approved of how he handled his meeting with President Putin, according to Axios/SurveyMonkey. The Wall Street Journal also reports that in 1992, 15 of the 20 most manufacturing intensive Congressional districts in America […]
Prepare For A More Regionalised, Fragmented Polymers World
By John Richardson THE above map global shows our base-case forecasts for global trade flows of HDPE, LLDPE and PP in 2025. It is the result of lots of hard work and smart thinking around feedstock costs, logistics costs and demand growth etc. and is a good start to your scenario planning process. The map […]
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