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 […]
Asian Chemical Connections
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 […]
Further collapse in China auto sales underlines radical change in petrochemicals business model
By John Richardson HAVE FEEDSTOCK will build has been the route to success for many years in the petrochemicals business. If you have never experienced anything else then a change in the paradigm is very hard to come to terms with. What often instead happens is that a new paradigm is simply rejected in favour […]
Global PE market to remain long despite Saudi cutbacks caused by drone attack
By John Richardson TRADERS lucky enough to be holding long positions in PE ahead of the 14 September drone attack on Saudi oil and gas facilities want everyone to believe that this has changed everything. They will tell you over and over again, if you’re prepared to listen, that the resulting reduction in ethane supply […]
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. […]
China imposes trade-war tariffs in US LDPE and raises tariffs on HDPE and LLDPE
By John Richardson DON’T SAY I didn’t tell you. As I predicted, China has levied trade-war tariffs on US LDPE as the long term US and China battles over trade, technology and geopolitics intensify. US LDPE imports will be subject to 10% tariffs from 15 December. The 25% tariffs that China imposed on US HDPE […]
President Trump’s “better off without China” tweet not supported by the data
The opinions in this blog post are, as always, my own and do not reflect the views of ICIS By John Richardson DONALD TRUMP insisted in a tweet last Friday that the US economy didn’t need China, “and frankly we would be better off without them.” He called on US companies to pull out […]