By John Richardson THE RISE in Asian spot ethylene prices is being cited as evidence of better downstream polyethylene (PE) supply and demand fundamentals. I am not convinced, partly because the ethylene spot market in Asia is so thinly traded that a myriad of unrelated factors could be behind the recent price increases. PE prices […]
Asian Chemical Connections
US and Iran conflict in a world of declining growth and fragile supply chains
By John Richardson THINK of the Fukushima disaster in 2011 and multiply its impact on global supply chains by at least a factor of ten. Then place the supply disruptions from the US and Iran conflict into the context of an already weakening global economy and you can begin to grasp the risks ahead. The […]
Iran and the US: Assessing the risks for petrochemicals and the global economy
As always, these are my personal views only and don’t reflect the views of ICIS By John Richardson AT TIMES like this it’s very hard to be dispassionate. Emotions run high on either side of the widening political gulf as the two factions shout ever-more loudly at each other and refuse to listen. This is […]
US/China trade deal achieves little as China pushes hard towards petrochemicals self-sufficiency
By John Richardson PRESIDENT Trump has promised a “tremendous amount of business” for US farmers following the announcement of a “Phase 1” trade agreement with China. But US claims that China will eventually buy up to as much as $50bn of US agricultural products seem to defy economic logic given the price of soybeans, the […]
Long term downcycle will transform global petrochemicals, creating new Winners and Losers
By John Richardson THIS IS not a normal downcycle. Please get over that idea however many people, both inside and outside your company, tell you this. It is very tempting to believe that this is a normal bit of bloodletting that comes along ever so often. The temptation comes from the fact that it is […]
Asian PE and PP margins at lowest levels in at least five years and will go lower……
By John Richardson NOT since at least the beginning of 2014 have Northeast and Southeast Asian polyethylene (PE) and polypropylene (PP) margins been as low as they were for the week ending 29 November. We only began our margin assessments in 2014 and so last week’s margins may be lowest for an even longer period. […]
Asian polypropylene market heads for major 2020 downturn
By John Richardson THE ASIAN polypropylene (PP) market hasn’t been as bad as the region’s polyethylene (PE) market in 2019 because of much more limited increases in supply. Whereas the PE market has been flooded with new US production, especially in linear-low density PE (LLDPE), increases in PP output have been much lower. Not for […]
China new vehicle sales: A long term decline and what this means for petrochemicals
By John Richardson THE MAINSTREAM view is that there is nothing fundamental about the decline in new vehicle sales in China. Conventional analysis blames the 2018-2019 slump on the 50% cut in value-added taxes on new autos that came to end in December 2017. This brought forward demand as buyers scrambled to beat the end […]
Asian polyethylene shutdowns? Once again, good luck with that idea
By John Richardson I was new to the game as I had only been analysing the petrochemicals business for 12 months. Hence, when a US industry executive told me that South Korean cracker-to-polyethylene (PE) plants would shut down, during the Asian Financial Crisis, I almost believed him. This was until I made my first visit […]
Vietnam polyethylene demand boom may not last because of infrastructure pressures
By John Richardson LET’S start with some good news: Vietnamese polyethylene (PE) demand looks set to grow by 16% in 2019 over last year compared with our base-case assumption of 8%. This would deliver 131,000 tonnes of demand more than we have forecast (see the above chart on the left). Note that the same surely […]