By John Richardson HOW long a recovery lasts is always relative to your investment horizons. For example, if you are a day trader in the Dalian Commodity Exchange’s futures contract in linear low-density polyethylene (LLDPE), a rebound might only need to last 24 hours for you to make money. And if you are trading in […]
Asian Chemical Connections
“Known Unknowns” And China
By John Richardson IF the blog had a dollar for every time we had read reports about Chinese growth being constantly buoyed by rising domestic income levels and increasing urbanisation, we would probably be as rich as a mid-level executive in a state-owned enterprise (in other words, very rich – way beyond such an executive’s […]
Confidence Is Often Relative
By John Richardson CONFIDENCE can be very relative. So, compared with late Q4 last year when global cracker and derivatives markets ground to a virtual halt, perhaps it was inevitable that January would see some kind of rebound in the industry’s mood. Deep operating rate cuts in Northeast Asia have been a factor behind this […]
Morgan Stanley Bullish Again
By John Richardson MORGAN Stanley has once again produced a very bullish forecast for China’s polyethylene (PE) market. The investment bank was famous for devising the SuperCycle theory in late 2010. It failed to take into account clear signs that 2011 was going to be a bad year. Version 2.0 of its bullish view on the industry assumes that 2011 was so […]
Seeing Through The Smokescreens
By John Richardson CHEMICALS traders and the financial community, quite obviously, benefit enormously from volatility. Thus we have seen certain chemicals markets being talked-up by the trading community on the basis that the post-Lunar New Year period will see a surge in demand. Equally, the job of the financial community at the moment is to […]
Forty Five Minutes On China
By John Richardson CHINA’S GDP (gross domestic product) growth could fall to only 6.6 percent this year compared with 9.2 percent in 2011, warned Patrick Chovanec, an economist at the Tsinghua University’s School of Economics and Management in Beijing in this Reuters article. Even this very-low rate of growth for China will only be achieved […]
The Fragility Of the Recovery Story
By John Richardson A VERY illuminating discussion with a Shanghai-located sales and marketing manager for a major Asian polyolefin producer reveals how the post- Lunar New Year “recovery” story being sold by the investment community is on even more shaky ground than we at first thought. Three points worth highlighting, before we publish verbatim what he said, […]
Difficult Year For Naphth-based PE
By John Richardson THE first quarter of the 2012, and very probably the rest of the year, look likely to be very difficult for Asia’s naphtha-based polyethylene (PE) producers as a result of more competition from the Middle East in the vital China market. The other big negative factor looks likely to be Chinese demand […]
Investors Predict Strong Petchems Rebound
By John Richardson POLYETHYLENE (PE) inventory levels are thought to be so low at the converter end of the business in China that a case is being made for a strong recovery in demand and pricing post-Lunar New Year. A further factor behind the anticipated rebound are forecasts of further credit easing by the Chinese […]
Wile E Coyote And China
By John Richardson THE blog, a bit like Wile E Coyote who always fails to catch Road Runner, has been amazed in recent weeks at certain people in the chemicals industry who, in public at least, fail to grasp the complexities confronting China’s economy in 2012. We wish that our experience would, at least for some […]
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