By John Richardson US BUSINESSES are making arrangements to diversify their supply chains away from China because of a recognition that, even if a short term trade deal is done, the long term trajectory is towards a much more confrontational relationship between the US and China, says Jacob Parker, vice president of China operations at […]
Asian Chemical Connections
The US places heavy bets on LLDPE at a time of demand erosion
By John Richardson IT IS a remarkably single product-focused strategy given the exposure of linear-low density polyethylene (LLDPE) to demand erosion from the global plastics rubbish crisis. Looking across the three grades of PE, the US will end up with a 33% global share of net exports (exports minus imports) amongst the world’s net export […]
China’s real GDP growth below 6% as mono-ethylene glycols margins provide early indicator of depth of downturn
By John Richardson GLOBAL stock markets will now doubt respond negatively to the news that China’s official GDP growth in Q3 fell to a 30-year low of 6%. But it important to put this event into the proper context. First of all, nobody has ever been able to trust of the official GDP growth numbers. […]
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 […]
China PE overstocking rises to more than 1m tonnes as exporters continue to flood the market
By John Richardson CHINA is heading for another good year of PE demand growth with estimates from several players of growth at around of 8%. This is in line with our forecast for 2019 growth of 7.7%. But this is clearly not a market growing at 13%, which is what our estimates of local production […]
If Strait of Hormuz closed down: Effect on petrochemicals exports
By John Richardson NEITHER SIDE seems to want a war but at febrile times like this miscalculations could see the US and Iran in a full-scale conflict. Iran might feel it has little more to lose. Its economy is suffering so badly from increased sanctions, especially as a result of the collapse in its oil […]
President Trump can only cause major economic damage by beating China, unless he has a time machine
The views in this blog, are, as always, my own personal views and don’t reflect the views of ICIS. Thanks By John Richardson LORD SALISBURY, who served as British Prime Minister and Foreign Secretary in the late 19th and early 20th centuries, understood it was impossible to turn back time to the American Civil of […]
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. […]
Global PP demand could be 81.5m tonnes less than forecast in 2019-2028 as China Debt Supercycle ends
By John Richardson SOME PEOPLE argue that despite the rapid rise in Chinese consumer debt over the last few years, there is nothing to worry about because consumer debt as a percentage of GDP China still lags behind Western countries. This misses the point and is an example of the dangerous “all is right with […]
China economic stimulus and PP: How global demand could have been 71m tonnes smaller
By John Richardson CHINA came to the rescue of the global economy in 2009. This wasn’t for altruistic reasons as a government study said that unless a huge stimulus programme was launched, 20m Chinese workers would return to the coastal cities from inland China after the Lunar New Year in 2009 without jobs. This would […]