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 […]
Asian Chemical Connections
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 […]
The global polyethylene paradigm shift of permanently weaker demand
By John Richardson MALCOLM GLADWELL, in his very thought provoking book The Outliers, writes about what we think is gut instinct, but is instead the result of a minimum of 10,000 hours of doing something: Sub-conscious expertise that tells us how to think and react in most situations because we’ve been here before. So, when […]
IMF confirms global economy all about China as US threat to growth persists
By John Richardson DON’T SAY I didn’t tell you. An important new IMF study confirms what I’ve been arguing for a long time: China has overtaken the US to become the biggest locomotive of global economic growth. In the five years between 2013 and 2028, China accounted for 28% of all global growth, behind the […]
China’s inland petrochemicals demand will never come anywhere close to coastal levels
By John Richardson ONE DIMENSIONAL analysis of China would have you believe that as per capita income growth steadily improves in China’s vast hinterland, its inland provinces, huge volumes of petrochemicals and polymers demand will be added. This analysis is built on the two decades-old government “Go West” campaign of huge investment in infrastructure aimed […]
Surge in US polyethylene exports occurs as China growth slows, Asian margins turn negative
By John Richardson PERHAPS ONE could argue, but I certainly wouldn’t, that in a perfect world the extraordinary rise in US polyethylene (PE) exports, which are detailed in the chart on the left, would have just about found a comfortable home. But when has the world ever been perfect? It certainly isn’t today: The IMF […]
The new China and the rise of the Millennials transform the petrochemicals business model
By John Richardson ANYONE who has anything to do with the petrochemicals industry or anything to do with the global economy, in other words all of us, needs to pay close attention to the above chart and what it is telling us. This once again demonstrates the enormous value of the ICIS Supply & Demand […]
Unsustainable boom in China auto market ends as sales of new vehicles move permanently lower
By John Richardson THERE IS a big temptation when making forecasts of becoming too excited about the recent past. Judgements are at risk of being blurred by euphoria, resulting in very bad investment decisions based on the notion that the recent past will reflect the long-term future. Paradigm shifts do occur from time to time. […]
How sustainability will upend the petrochemicals cost curve, creating new winners and losers
By John Richardson THE FUTURE I described on Wednesday, of declining petrochemicals and polymers demand growth as the Millennials reshape consumer markets, is only doom and gloom if you let it be doom and gloom. This represents a fantastic opportunity for companies in our industry to entirely reshape their strategies and emerge as winners. Gone […]
Environmental credits separate polymer Winners and Losers as the world divides
By John Richardson THE WORLD is becoming a much more complex and fragmented place as the consensus about the benefits of open markets and the largely unrestricted movement of labour is challenged. There also seems to be a split between those individuals and governments that agree with the science supporting human-made climate change versus those […]