By John Richardson TAKE a look at the above chart and ask yourself this question, “Why is it that the spreads between high-density polyethylene (HDPE) injection grade and naphtha have been so good so far this year?” The same has therefore, of course, applied to margins for integrated PE producers. Let’s first of all look […]
Asian Chemical Connections
Why China’s Stock Market Crisis Is Great News For Economic Reforms
By John Richardson MOST people view the renewed collapse in China’s stock markets as bad news because of what it says about the country’s overall economy. In the short term this is right as the fresh decline in equities serves as another reminder that there will be no easy solutions to China’s long-standing and deeply-entrenched […]
China PP Production Up 23% As Self-Sufficiency Drive Continues
By John Richardson THE above chart provides further support for the argument I have been making for the last three years – that China’s future growth in petrochemicals capacity, and how this new capacity will operate, is not just about Western notions of economics. There is an awful lot more to this story than people […]
China’s Economic Realities In Four Charts
I’ll be again posting less frequently this week – today, obviously, Wednesday and also on Friday – as I am on still on leave. The blog returns to normal from the week starting 27 July. By John Richardson SOME graphs are worth many thousands of words, and so here are four graphs to start […]
Oil Markets Return To Supply And Demand Realities
By John Richardson ONLY a couple of months ago a lot of people seemed confident that oil prices had settled down in the region $60-80 a barrel. At that time, though, in my 13 May seven-point guide to oil markets in H2, I flagged up some of the risks ahead. These risks remain, on top of […]
Good Luck Isn’t The Same As Good Planning
By John Richardson The tail has long wagged the dog in Asia’s polyethylene (PE) market. Whilst the spot merchant ethylene market accounts for only around 5% of the total amount of ethylene that is produced in the region, ethylene spot prices drive polyethylene (PE) spot prices – with just about everyone buying and selling PE […]
Spend Your Supply-Driven Profits On Managing Demand
By John Richardson IT has been a fantastic few months for Asia’s naphtha cracker industry as the above chart further illustrates. Even in the case of poor old, very heavily commoditised raffia-grade polypropylene (PP), variable cost margins so far this year for integrated naphtha-based players have averaged $389/tonne. The story is even better for low-density […]
The Data Is Still Staring Everyone In The Face
By John Richardson I CONTINUE to worry that people are only paying attention to when the Fed will raise interest rates. As a result, they are missing the far bigger story, which is the slowdown in both developing and developed economies resulting from events in China. The good news is that this view is gaining […]
Supply Exceptionally Tight, But Real Demand Still Struggles
By John Richardson WHAT a fantastic year it has so far been for margins, with the chart above showing how in one grade of polyethylene (PE), Northeast Asia (NEA) and European producers are really, really cashing in. The same applies across many others grades of both PE and polypropylene (PP). In Northeast Asia, one of […]
US Oil, Gas, Chemicals Drowning In Excess Of Credit
By John Richardson THE US oil, gas and petrochemicals sectors are drowning in an excess of credit that has distorted rational analysis of long-term supply and demand fundamentals. So, just as is the case with China manufacturing in general, these misguided investments are in danger of contributing to a prolonged period of global deflation. Let’s […]
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