By John Richardson THE consensus view is that China’s economy bottomed out in H1 and will see a recovery in GDP growth during the second half. Much hope has been attached to more government stimulus delivering a short-term boost to growth, even if there are concerns over the long-term damage that further investment-driven GDP could cause. […]
Asian Chemical Connections
PVC’s Unsustainable China Growth
By John Richardson POLYMER markets continue to tell us that China’s 2009-2010 economic stimulus programme delivered unsustainable demand growth. China’s demand for polyvinyl chloride (PVC) surged from 10.9m tonnes in 2009 to 13.2m tonnes in 2010, according to Global Trade Information Services (GTIS). Demand then reached 14.1m tonnes in 2011. The slowdown in growth reflected government […]
China PE Demand Down 3 Percent
By John Richardson GROUND level economic conditions in China are still a lot weaker than headline GDP (gross domestic product) numbers suggest. For example, a polyvinyl chloride (PVC) sales and marketing executive said: “PVC demand growth is going to be in minus territory this year. Carbide-based producers are likely to continue to have to run […]
China’s Unreliable GDP Data
By John Richardson THE economic slowdown throughout Asia became more apparent last week with the release of disappointing data, prompting interest rate cuts in China, Vietnam and South Korea. China’s key polyethylene (PE) market responded as trading volumes fell and sentiment weakened for the week ending 13 July, according to ICIS. Market participants, however, expressed […]
China Deflation
The second of our series of blog posts on China’s economic challenges over the next 12-18 months focuses on deflation. By John Richardson DEFLATION has now become a major concern for the Chinese economy following the release of official data earlier this week that showed a 2.1 percent decline in producer prices in June […]
June China Lending Disappoints
By John Richardson POLYETHYLENE (PE) and polypropylene (PP) offer prices were reportedly on the rise across Asia earlier this week on increasing geopolitical tensions over Iran that led to a hike in crude prices. “Butene-grade linear-low density (LLDPE) offers have increased by $40-50/tonne,” said a source with a major producer. September LLDPE futures contract […]
Managing China’s Political Challenge
By John Richardson Getting on with politicians is always pretty useful for doing business anywhere. And in China right now, it is a case of working key relationships with the right set of senior politicians who are set to take control of the Politburo later this year, after the once-in-a-decade leadership transition has taken place. […]
China Jan-May PE Demand Declines
By John Richardson THE chart above, from data provided by Global Trade Information Services, further confirms that all hope of any substantial growth in China’s commodity grade polyethylene (PE) market during 2012 needs to be given up. Companies, and chemicals investors, should further revise their expectations. The five percent decline in apparent demand growth (imports plus […]
Not “Business As Usual”
By John Richardson THE notion that Asian polyethylene (PE) markets would soon bottom out, which was widely expressed at the Asia Petrochemical Industry Conference (APIC) last month, seems to have been discredited. There was a slight recovery for the week ending 1 June, when prices had crept up by $10-20/tonne on improved confidence amongst […]
Stimulus Nonsense Raises Hopes
By John Richardson EARNINGS estimates for South Korean petrochemical companies will have to be cut by 50 percent for the full year 2012, said an industry observer. “It is quite clear that the first quarter was dreadful for the South Koreans and the second quarter will probably be even worse,” he added. There was a […]
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