By John Richardson ANOTHER week and sadly a repeat of the same old story: Depressed polyolefins demand in China. Pricing did, however, increase – by $10-50/tonne in the case of polyethylene (PE) and $10-40/tonne for polypropylene (PP), according to assessments by ICIS pricing for the week ending 16 March. But our colleagues at ICIS […]
Asian Chemical Connections
China’s Leadership Struggle
By John Richardson IT is still an article of faith among some people in the chemicals industry that all you have to do is concentrate on cost-efficient supply and the demand in developing countries such as China will inevitably continue on an even, upward course. But this week’s extraordinary political events in China further demonstrates […]
Inventories And Price Recoveries
By John Richardson THE role of inventory management in European petrochemical price recoveries needs to be re-examined, given persistently weak underlying economic fundamentals. In Europe, as this ICIS Insight article from my colleague Mark Victory points out, benzene contract prices have risen by 40%, propylene contracts have increased by 20% and ethylene contract prices by 21 […]
China Polyester Chain Weakens
By Malini Hariharan The polyester chain is feeling the strain of poor Chinese demand. Weak export demand and Chinese government policy are also impacting this sector, as is the case in polyolefins. A further factor behind the problems in the polyester chain is the fall in cotton prices, as fellow blogger Paul Hodges points out. Monoethylene […]
Oil Prices And Demand Destruction
By John Richardson THE danger that high oil prices pose to the global economy, and therefore, of course, petrochemicals demand, has been highlighted by a new report from HSBC. It makes the point that quantitative easing, which has led to investors fleeing a weaker dollar into commodities, is a major contributory factor behind the rally […]
China Auto Sales Point To Long-term Shift
By John Richardson The impact of Chinese government policy adjustments on petrochemicals demand was further highlighted late last week, when auto-sales figures for January-February were released. Sales declined by 4.4 percent, the worst two-month start for the industry in seven years, with local-brand sales falling by 17 percent. This is sure to dampen the mood […]
China Set To Gain The Most From Inland Boom
By John Richardson LAST week we discussed how inland markets in China – which are booming thanks to government efforts to raise rural income levels – offer huge opportunities for petrochemicals producers. Here are a few further reasons to believe that it will be local rather than overseas producers which benefit the most. Beijing […]
PE Margins Lowest On Record
By John Richardson ANOTHER week has gone by with no evidence of significantly stronger polyethylene (PE) volumes in China. Rising labour costs, because of mandated government increases in minimum wages, and the shortages of labour post-Lunar New Year, are still making it difficult for plastic converters to run at full capacity. The recovery in pricing […]
China Inland Boom: Who Will Benefit?
By John Richardson This fascinating article in The Economist raises further important questions about the impact on petrochemicals of changing migration patterns. Last week, we discussed how what industry executives had been discussing for three years has finally happened: Severe labour shortages in the southern and eastern provinces post-Lunar New Year, preventing chemicals and polymer […]
The Changing Landscape For Manufacturers
The New Normal involves three major transformations in the nature of consumer markets, which are: • The increasing size of the New Old 55+ age group in the West. • Too many young people struggling with higher unemployment. • Large number of people moving out of poverty in the developing world. These are the […]
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