In the second part of our analysis of the effect of China’s latest interest-rate rise we look at how the polyolefin market has alllegedly taken the decision in its stride. Crude markets are a different story altogether…. By John Richardson CHINA’S polyolefin market has improved over the last week thanks to a recovery in oil prices […]
Asian Chemical Connections
Impact of China’s Latest Rate Rise – Part 1
Here is the first of two posts that will analyse the implications of China’s decision to raise interest rates for the third time this year By John Richardson CHINA’S decision to once again raise interest rates will put further pressure on the hard-pressed small and medium-sized enterprises (SMEs) that make up the bulk of the country’s chemicals and polymer […]
European PE, PP Contracts Likely To Fall
By John Richardson EUROPEAN polyolefin converters seem quite justified in pressurising their suppliers for further price reductions, given weak macro-economic fundamentals and still-excellent profitability at the cracker end of the value chain. The news from China continues to get worse. China’s Vice-Premier Wang Qishan said last week that the government’s 2011 targets for GDP growth and […]
China Auto Market Provides Clear Evidence
By John Richardson DESTOCKING is obviously not the main driver of the decline in China’s polyolefins market, despite what a dwindling band of optimists are still arguing. The glaringly transparent reason for the fallacy of the fading belief is a decline in key end-use markets for polyoleifins – and for other polymers and chemicals. Today […]
Clinging On To Vain Hopes
By John Richardson ANYONE clinging on to the hope that the weakness in the global polyolefin market is merely down to China going through a prolonged period of destocking could face a rude awakening. China’s polyethylene (PE) demand was down 4% in January-May this year, at 7.1m tonnes, compared with the same period in 2010. […]
Boom, Gloom and the New Normal – Chapter 2 Published Today
Chapter 2 of Boom, Gloom and the New Normal is published today. In a completely new and challenging analysis we argue: • The Western BabyBoomers boosted chemical demand for housing, autos and electronics during their peak consumption years between 1980-2000. But this demand is unlikely to be sustained, now they are entering the 55+ age […]
PE Market Weakness Spreads To US
By Malini Hariharan After Europe, the US polyethylene (PE) market has started showing increasing signs of weakness. Spot offers have rapidly fallen putting downward pressure on June contracts that are currently under negotiation. Producers may have no choice but to settle at lower levels as exports to Asia is no longer a viable option. Spot […]
European Markets Weaken Further
By John Richardson THE dreadful state of European polyolefin markets became even more evident late last week as prices continued their declines. Discussions on further reductions in European olefin contract prices were also set to begin today. High density polyethylene (HDPE) and linear low-density polyethylene (LLDPE) spot prices have now fallen by Euros80-150/tonne in June, […]
Chemicals Buying & The IEA Decision
By John Richardson CHEMICALS and polymer demand looks even less likely to be supported by “buying forward” following yesterday’s decision by the International Energy Agency (IEA) to release 60m barrels of crude into the market. Here is a bit of context first before we look at the implications of the IEA decision, which, along […]
US Olefins, Polyolefins In Denial
By John Richardson THE majority of financial analysts seem to be clinging on to the hope that the recovery in petrochemicals demand from China is about to happen. This doesn’t just apply to our industry. Analysts across many sectors appear to have staked their reputations on a return to the Old Normal of booming […]
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