By John Richardson CHIINA’S ethylene equivalent imports will see zero growth over the next 5-7 years and the country’s propylene equivalent import requirement will decline over the same period, says a source with a major oil, gas and petrochemicals producer. This exceptionally bearish forecast is based on lower demand growth as China undergoes major economic […]
Asian Chemical Connections
Strong June, But Shaky Q3
By John Richardson JUNE was a good month for Asia’s polyethylene (PE) industry. Both prices and margins (see the above charts) improved as a result of a reported delay to the start-up of a new big new complex that left end-users short of inventory. “China’s converters had held back for such a long time from […]
China Credit Crunch: Petchem Impact
By John Richardson CHINA’S decision to make more funds available to lenders in order to ease the credit crunch does not represent a long-term change in policy direction, we think. “The worst is over. The People’s Bank of China (PBOC) is likely to serve as a [lender of] last resort and intervene to calm […]
It Is Just Too Difficult
Smart bottles By John Richardson THERE is a growing concern amongst some polyolefin industry executives that, despite the economic problems first in China and now India, there is still a great deal of enthusiasm for adding new capacity, as we discuss in this ICIS Insight article. “Now that China has weakened, everybody has switched […]
Indonesia’s Challenges
By John Richardson INDONESIA was the subject of much enthusiasm when the blog hosted a webinar on Monday on China Polyolefins Markets. We will provide a link to a recorded version of the event shortly. The reason for the enthusiasm over Indonesia is perhaps because China, and now quite likely India, no longer guarantee strong growth. […]
China Petchems H2 Price Rally
By John Richardson CHINA’S petrochemical prices might rally in the second half of this year, along with local stock markets, in response to the delayed impact of the big surge in bank lending that took place in Q1. James Gruber, author of the Asia Confidential newsletter, argues that a mild H2 recovery is possible because: […]
China Compensation
By John Richardson A MAJOR Southeast Asian polyethylene (PE) producer has reduced its percentage of exports to China from 30-40% in 2012 to just 10% so far this year, a source with the producer told the blog on the sidelines of the Asia Petrochemical Industry Conference (APIC) in Taipei. This is further confirmation of the […]
One In Three Chance Of 5% China GDP Growth
By John Richardson THERE is a one in three chance of China’s real GDP growth averaging 5% or less over four consecutive quarters before the end of 2014, warns Nomura, said Bloomberg in this article. And the bank added that its China Stress Index, which monitors the risk of a hard landing, recorded its highest […]
China To Take A Big Stick To Financial Crisis
By John Richardson CHINA is facing a financial crisis that could put US sub-prime into the shade. “Between 2007 and 2012, the ratio of credit to GDP climbed to more than 190%, an increase of 60 percentage points,” said US funds manager, GMO, in a report. “China’s recent expansion of credit relative to GDP is […]
Coal-To-Chemicals Funding Clampdown
By John Richardson Coal-to-chemicals is one of nine major industrial sectors that the China Banking Regulatory Commission has warned is blighted with overcapacity and other risks related to what it calls, rather disingenuously, “the economic cycle”. Thus, the commission has advised the state-owned banks to exercise greater caution in extending further funding to these sectors. […]
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