By John Richardson THE IMF produced a very interesting study earlier this month, in which it estimated that if it had not been for China’s giant economic stimulus programme the country’s real GDP growth would have averaged only 5.3% per annum during the five years to 2016. Instead, however, the IMF estimates that China’s economy […]
Asian Chemical Connections
China Growth Slows On Collapse In Shadow Bank Financing
By John Richardson YOU should print-off the above chart and stick it on your chemicals company boardroom wall. From fellow blogger Paul Hodges, it shows the collapse in credit issued via China’s shadow banking system. It is the shadow banking system that has driven China’s debt-t0-GDP ratio to as high as 650% – and could […]
China’s Polypropylene Market Reflects Wider Economic Problems
By John Richardson WHEN traders acquired big volumes of polypropylene (PP) cargoes to export to China at the end of last year for arrival in Q1, they were confident that the country’s domestic market would easily absorb just about every single pellet in every single container. Their confidence was based on the recovery in China’s […]
China Polyolefins: An Outlook For The Rest Of 2017
By John Richardson AS THE chart above shows, China is suffering from a bout a polyolefins indigestion right now as a result of a sharp rise in both imports and domestic production. This helps to explain the recent falls in pricing. This extra supply might have been very easily absorbed if markets had bounced back […]
China’s PP Import Decline: Did you See This Coming?
By John Richardson THE smart people in the polypropylene (PP) business will have already adjusted their strategies in response to evidence, from 2009 onwards, that China was very aggressively expanding its PP capacities. They would have tracked the rapid rate of project approvals, whilst also ignoring claims that many of these projects would never be […]
China Jan-Feb Polyethylene Imports Fall 22%
By John Richardson CHINA’S polyethylene (PE) imports declined again in February, and are down by an average of 22% over both January and February of this year compared with the same period in 2014. SOME people will tell you that this is nothing to be seriously worried about. They will argue that January-February 2014, imports reached […]
Another Hammer Blow For China Polyethylene
By John Richardson CHINA is bringing down the hammer time and time again as it continues to play the whack-a-mole game. The latest blow to one or several of the unlucky moles involves the People’s Bank of China’s (PBOC) decision to withdraw cash from the financial system for the first time since early August. “The […]
China Polyethylene: Fitting 11% Into 6%
By John Richardson ELEVEN per cent apparent demand growth in polyethylene (PE) in China will not go into estimates of real demand growth at no more than 6%. This is our concern based on the latest set of data on the market (see the above slide). As you can see: Apparent demand growth (imports minus […]
China Iron Ore Stocks Can Build 1,200 Empire State Buildings
By John Richardson CHINA’S commodity imports boom was, of course, mainly down to the rise its middle class as hundreds of millions more of its citizens became rich enough to buy a refrigerator, a TV and a car for the first time. Or was it? Daniel De Blocq van Schetlinga, the Hong Kong-based head of […]
China Polypropylene “Demand” Surges
By John Richardson CHINA’s polypropylene (PP) market has been consistently described as subdued throughout this year. End-users in China have persistently complained, throughout the year, of credit shortages as a result of China’s economic reforms and so their resin buying patterns have been sporadic and hand-to-mouth. How do we therefore explain the above chart, which shows a […]
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