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Asian Chemical Connections

A Polyolefin Trader’s Perspective

By John Richardson Word for word, see below what an Asian polyolefins trader told us yesterday: “This year has been absolutely terrible, the worst I can remember in eight years in this business, and even worse than 2008. There is just no demand out there. “There was supposed to be a recovery after the Chinese […]

China Economic Optimism

By John Richardson ECONOMISTS think China’s growth has bottomed out, thanks to unexpectedly strong March bank lending. They also think that interest rates will stay low for a long time, even if rates cannot be cut because of the inflation problem.  New loans in March totalled Rmb1trn ($159bn), more than banking analysts had expected. This renewed […]

Depressed China Demand Continues

By John Richardson ANOTHER week and sadly a repeat of the same old story: Depressed polyolefins demand in China. Pricing did, however, increase – by $10-50/tonne in the case of polyethylene (PE) and $10-40/tonne for polypropylene (PP), according to assessments by ICIS pricing for the week ending 16 March.   But our colleagues at ICIS […]

Europe Markets Lure Asian Polyolefins

By John Richardson EXACTLY the same scenario is playing out in European polyolefin markets, as in Latin America and possibly the US, my ICIS colleague Linda Naylor reported last Friday. High polyethylene (PE) and polypropylene (PP) prices in Europe have led to increased offers for re-exported material from China, according to Linda – our European […]

Pricing To Struggle For The Rest of 2012

By John Richardson Further confirmation of the themes we raised yesterday emerged from an interview with a senior polyolefin industry source, with some important new analysis. Profitability in Asia is the worst of any of the three regions, he told us, although volumes remain good. In the US, he characterised demand as “pretty reasonable”, but […]

A Palpable Sense Of Panic

By John Richardson THE blog has sought to add to the debate during the four years it has been operating by thinking around the big macro-economic issues, and constantly keeping in touch with our market contacts at “ground level” in the petrochemicals industry, in an attempt to assess where markets might be heading. We haven’t […]

An All Mighty Dalian Muddle

By John Richardson UNDERSTANDING the Dalian Commodity Exchange’s futures contract in RMB-priced linear low-density polyethylene ((LLDPE) requires an understanding of what the traders are up to at any particular point in time, as this is almost entirely a speculators’ market. So, what happened late last year is very illuminating. The chart below shows a sharp spike […]

Seeing Through The Smokescreens

By John Richardson CHEMICALS traders and the financial community, quite obviously, benefit enormously from volatility. Thus we have seen certain chemicals markets being talked-up by the trading community on the basis that the post-Lunar New Year period will see a surge in demand. Equally, the job of the financial community at the moment is to […]

The Fragility Of the Recovery Story

By John Richardson A VERY illuminating discussion with a Shanghai-located sales and marketing manager for a major Asian polyolefin producer reveals how the post- Lunar New Year “recovery” story being sold by the investment community is on even more shaky ground than we at first thought. Three points worth highlighting, before we publish verbatim what he said, […]

Difficult Year For Naphth-based PE

By John Richardson THE first quarter of the 2012, and very probably the rest of the year, look likely to be very difficult for Asia’s naphtha-based polyethylene (PE) producers as a result of more competition from the Middle East in the vital China market. The other big negative factor looks likely to be Chinese demand […]

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