By John Richardson ANYONE who visits Kuala Lumpur, Malaysia’s capital city, might well come away with the impression that everything is well with the country. The hotels are heaving as are the restaurants, bars and shopping centres. So are the stalls on Petaling Street where, remarkably, it is possible to buy a luxury, top-of-the range […]
Asian Chemical Connections
The Three Essentials Of China Credit
By John Richardson There are three things you need to bear in mind about credit creation in China, which according to the government’s own data, are as follows: In 2007, $1 of additional credit added 83 cents to GDP. By 2013, $1 was only adding 17 cents. This year, each additional dollar of lending will only […]
China Adjusts To “Zero Inflation” In Textiles
By John Richardson CHINA’S polyester chain business is undergoing a painful adjustment period, as the slide above indicates, as a result of: Expectations that cotton prices will drop to a five-year low in 2014-2015. This is largely the result of China’s decision to directly support farm incomes, rather than buying-up ever more cotton stocks. Cotton […]
China: When Sentiment Tells Us Something Important
By John Richardson THE blog once asked a seasoned petrochemicals industry consultant what the price of polypropylene (PP) was. “It depends on whether the Hong Kong traders are in a good or a bad mood this morning,” was his reply. Excellent point, of course, because sentiment plays an important part in market direction – and, […]
China’s Petchem Markets Contradict Latest PMI
By John Richardson IF you study China’s petrochemicals markets on a regular basis they tell you something very important: That despite persistent efforts to tighten-up supply across several sectors in order to entice end-users into stock building, “hand-to-mouth” purchasing remains their policy. For example, polypropylene (PP) import prices firmed on a heavy turnaround season in […]
US To Lose Out To China In Energy Race
By John Richardson ARE you either a “tree hugger” or a “climate science denier”? If you fall into one of these two categories, you will be one of the dwindling minority of people who support a multi-faceted approach to US energy policy, according to a US petrochemicals industry source. “The tree huggers are those who […]
Help Us Answer Some Very Important Questions
Sometimes two graphs can be worth a thousand words. IF the world economy is well and truly on the right course then why is that global chemicals operating rates have yet to return to their pre-crisis levels? (see the top chart from the American Chemistry Council). This is a very long downturn by historic […]
China, Chemicals And Interest-Rate Arbitrage
By John Richardson WHACK A MOLE on the head and another one pops up somewhere else. This is tremendous fun as an arcade game but not that much fun, metaphorically speaking, for the Chinese government. “The commodity-backed loans at the centre of a probe into an alleged financial scam at a Chinese port [Qingdao] are […]
China Property: It Is All About Local Govt Funding
By John Richardson THE more that things change in China’s property markets the more they stay the same, according to Deutsche Bank and Standard & Poor’s Ratings Service. First of all, here are the Deutsche Bank arguments why all remains well in the sector, courtesy of this FT Alphaville blog post: The current decline in […]
China’s Methanol Industry: Through The Looking Glass
By John Richardson AT first glance, some of the facts relating to China’s methanol sector sound like Jabberwocky sounded to Alice when she firs discovered the language of that name in the marvellous Lewis Carroll novel, Alice Through The Looking Glass. Here are some examples of what we are talking about, from our colleagues at […]
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