By John Richardson THE public mood of last week’s Gulf Petrochemicals and Chemicals Association (GPCA) conference in Dubai was resolutely optimistic. But in the corridors, the dining rooms and the coffee bars of the conference hotel, the mood was radically different. Taking, as usual, the polyethylene (PE) business as a reasonable proxy for the polymers […]
Asian Chemical Connections
The Risks Of Being An Outlier
By John Richardson THE blog has been mystified throughout this year over why senior industry executives appear to remain “in denial” over the weakness of global petrochemicals markets. Time and again we have heard the comment that the falls in demand were only the result of de-stocking. The public mood of the industry has soured […]
The Murkiest Of Outlooks
By John Richardson LACK OF visibility over what the New Year will bring for the global chemicals industry is a key feature of just about every conversation held with industry executives at the moment. Perfect forecasting is, of course, always impossible, but with the Eurozone in deep crisis and even China potentially facing its own bad-debt crisis, […]
The Planning Process Gets Harder
By John Richardson EARLIER this week we talked about the possibility that China might devalue the Yuan rather than allow it to further appreciate. We have since been told by a senior chemicals industry source that this is exactly what the Chinese government is evaluating in case the worst of possible outcomes occurs – the […]
Relief Rallies Will Not Be Sustained
By John Richardson FURTHER relief rallies in petrochemical markets that occur over the next few weeks and months will not change the overall direction. Buyers will inevitably run short of stocks down all the value chains and we thus will see some more brief flurries of price rises. Another driver of inventory rebuilding will be recoveries […]
Yuan Devaluation Needs To Be Considered
By John Richardson The “beggar my neighbour” trade wars that many economists feared would erupt after the global financial crisis were delayed thanks to fiscal stimulus. But now politicians will be under increasing pressure to erect trade barriers. “We are seeing a rise in antidumping cases involving chemicals,” a trade lawyer who specialises in the […]
China’s Debt Problems
By John Richardson Fellow blogger Paul Hodges made a convincing case in a post on Tuesday that China’s economic model faces some major challengs. “It seems increasingly clear that China‘s economic policy took a wrong turn 10 years ago, when it joined the World Trade Organisation,” wrote Hodges. From 2001 onwards, China transformed itself into the […]
It’s Always Helpful To Have A Plan
By John Richardson THERE are four major reasons why the first three quarters of 2011 have been excellent for chemicals companies, which are: 1.) Strong co-product credits have supported what have been weak commodity-grade polyolefin markets since March of this year (higher-value grades, such as co-polymer grade polypropylene for auto applications, have been better) 2.) […]
Expect Some China Chemicals Price Recovery….
….but let’s wait for the details to makea firm judgement, following Wen Jiabao’s comments about more help for small and medium-sized enterprises (SMEs), with the government also indicating an interest-rate cut by Q2 next year. How will any financial easing be balanced against the battle against inflation?
China Property Prices Down 30-50 Per Cent
By John Richardson A BIG reduction in real estate prices is now underway in China, creating the potential for more property/chemicals traders to go bust. The China Daily reports that home prices in suburban areas of Beijing, Shanghai, Shenzhen and Guangzhou fell by 30-50 per cent in July-September of this year compared with the same […]
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