By John Richardson THE TOP DOWN method of estimating polyethylene (PE) demand growth in China that uses multiples over GDP seems to have major weaknesses (and some of what follows may apply to other chemicals and polymers). The problem is with GDP itself. China’s actual and forecast official GDP growth numbers have long been understood […]
Asian Chemical Connections
China’s ageing population could cost 240 million tonnes of polymers demand
By John Richardson THERE was nothing miraculous about the “Chinese economic miracle”. What instead happened was a lucky coincidence of economic reforms and lots and lots of babies. The reforms were led by Deng Xiaoping who in 1978 decided to open up the Chinese economy. But the opening up would not have delivered significant benefits […]
Trade war dangers for US polyethylene re-emerge as talks appear to flounder
By John Richardson ONLY YESTERDAY just about everyone I spoke to in the polyethylene (PE) industry believed that the US and China would reach a trade deal by their 1 March deal. I agreed with them, although I kept cautioning during discussions that any trade deal would be paper thin […]
China propylene: 6.7m tonne demand hole threatens to swallow-up new projects
By John Richardson CONVENTIONAL opinion is that the global propylene market is moving from a balanced position to a balanced-to-tight position in 2018-2020. This will justify a significant wave of new investments is a common view. It is time to think again. We had expected Chinese propylene demand to grow by 6.9% in 2018 over […]
China 2018 polypropylene demand growth lowest in six years
By John Richardson CHINA’S apparent demand for polypropylene (PP) grew by 4.7% in 2018 over the previous year as the impact of the fall in auto and other durable goods sales hit the market hard, is my preliminary estimate. This would represent the lowest annual growth since 2012. Apparent demand, which is net imports plus […]
China slowdown threatens a million tonnes of lost styrene demand
By John Richardson CHINA’S apparent demand (*see note below) for styrene in 2018 looks set to have increased by just 2.5% over the previous year. This would be the lowest percentage growth and the smallest addition of new demand in tonnes since 2012. This would compare with our earlier estimate of real demand growth of […]
Risks for US petrochemicals grow as crucial trade talks resume
By John Richardson THE ABOVE chart further underlines what is at stake for the US petrochemicals industry as the US and China tomorrow resume high level trade talks in an attempt to end their trade war. The chart shows that if the US can export HDPE to China in 2019 and 2020, it will require […]
The polyethylene world is now even more hooked on China
By John Richardson CHINA’S NET PE imports look likely to have risen by an average of 20% in 2018 over the previous year across the three major grades. Apparent demand (net imports plus local production) looks as if it will be 12% higher. So much for excessive doom and gloom about the Chinese economy then? […]
China full-year lending decline confirms that Fed pause is a sideshow
By John Richardson CHINA’S full-year 2018 lending figures are out and they underline what I’d be warning throughout last year – the withdrawal of stimulus back to the levels of the pre-2009 period. Shadow bank lending, which has led to extraordinary growth in demand for chemicals and polymers, and all the things made from chemicals […]
Why China Will Rapidly Become Paraxylene Self-Sufficient
By John Richardson WOW, what an opportunity. That might be your reaction to the two above charts. On the left, you can see a quite breath taking rise in China’s paraxylene (PX) net imports (imports minus exports). In 2007, China’s net imports were around 2.6m tonnes of PX with last year’s total reaching 14.4m tonnes. […]