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 […]
Asian Chemical Connections
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. […]
China Economic Policies To Get Tougher
By John Richardson THERE will, of course, be bright spots in petrochemicals markets as a result of factors independent of China’s new economic direction. For example, as an aromatics trader points out, there are huge paraxylene (PX) capacity additions in Asia that will provide a great deal of support to reformer economics. In 2010-2013, he […]
China Demand Worse Than Just Before CNY
By John Richardson CHINA’S demand for polyethylene (PE) is lower than immediately ahead of the February Chinese New Year (CNY) break, said a Singapore-based polyolefins trader. “For demand to be less than just before the New Year, when most traders had already pulled out of the market to avoid cargoes being stranded at ports during […]
China’s New Credit Clampdown
By John Richardson BEIJING is clearly getting worried that its politically motivated 2012 economic stimulus programme has damaged the economy. “Just when the world had bought into a Chinese economic recovery, along comes the government throwing proverbial spanners in the works,” writes James Gruber, former fund manager and journalist in his latest Asia Confidential weekly […]
HSBC: China 2013 Polyethylene Market Has Peaked
By John Richardson A NEW report from HSBC backs up our concerns that the post-Chinese New Year polyethylene (PE) will be weaker than in December-January. The bank is with us in thinking that the stronger markets over the last two months have been driven by: *Lagging indicators such as strong export and import data and […]
Filtering Out The Noise
By John Richardson ONE should be careful about reading too much into the above margins for February as, of course, there was very little trading activity because of Chinese New Year (CNY), whilst oil and therefore naphtha prices increased. But the poor performances in December and January in Southeast and Northeast Asia, despite the rally […]
China SMEs Under More Strain
Source of picture: Rex Features By John Richardson WE are worried that the recovery in Asia’s chemicals and polymer markets may not be sustained. One of our biggest concerns is that China’s small and medium-sized enterprises (SMEs), which make up 60% of the economy and are responsible for 80% of employment, are under more […]
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