By John Richardson LET’S start with some good news: Vietnamese polyethylene (PE) demand looks set to grow by 16% in 2019 over last year compared with our base-case assumption of 8%. This would deliver 131,000 tonnes of demand more than we have forecast (see the above chart on the left). Note that the same surely […]
Asian Chemical Connections
IMF confirms global economy all about China as US threat to growth persists
By John Richardson DON’T SAY I didn’t tell you. An important new IMF study confirms what I’ve been arguing for a long time: China has overtaken the US to become the biggest locomotive of global economic growth. In the five years between 2013 and 2028, China accounted for 28% of all global growth, behind the […]
India must forget trying to follow China and should instead launch a Green New Deal
By John Richardson DON’T WORRY, I am told, India is on the way. As China undergoes major structural changes which guarantee much lower petrochemicals and polymers demand growth over the long term, it is widely assumed that India will pick up the mantle. But that what happened in China was an economic, social and political […]
China’s polyethylene indigestion persists as margins point to major downturn
By John Richardson CHINA’S POLYETHYLENE (PE) market continues to display signs of chronic indigestion. Significant overstocking persists with Northeast Asian integrated naphtha-based PE margins pointing to the weak start of the market with conditions are set to deteriorate. The core of the problem is that Chinese growth isn’t going to be anywhere near strong enough […]
China’s inland petrochemicals demand will never come anywhere close to coastal levels
By John Richardson ONE DIMENSIONAL analysis of China would have you believe that as per capita income growth steadily improves in China’s vast hinterland, its inland provinces, huge volumes of petrochemicals and polymers demand will be added. This analysis is built on the two decades-old government “Go West” campaign of huge investment in infrastructure aimed […]
US ethylene glycols: Diversifying away from China may prove impossible
By John Richardson US BUSINESSES are making arrangements to diversify their supply chains away from China because of a recognition that, even if a short term trade deal is done, the long term trajectory is towards a much more confrontational relationship between the US and China, says Jacob Parker, vice president of China operations at […]
China’s real GDP growth below 6% as mono-ethylene glycols margins provide early indicator of depth of downturn
By John Richardson GLOBAL stock markets will now doubt respond negatively to the news that China’s official GDP growth in Q3 fell to a 30-year low of 6%. But it important to put this event into the proper context. First of all, nobody has ever been able to trust of the official GDP growth numbers. […]
Surge in US polyethylene exports occurs as China growth slows, Asian margins turn negative
By John Richardson PERHAPS ONE could argue, but I certainly wouldn’t, that in a perfect world the extraordinary rise in US polyethylene (PE) exports, which are detailed in the chart on the left, would have just about found a comfortable home. But when has the world ever been perfect? It certainly isn’t today: The IMF […]
Little prospects of genuine US and China deal leave US petrochemicals exports very vulnerable
As always, this blog post expresses my own personal views and these are not the views of ICIS. Thanks By John Richardson TEN HOURS before I wrote this blog post, the South China Morning Post published an article headlined, “Dim prospects for a deal as China and US resume trade war talks”. The newspaper said […]
The new China and the rise of the Millennials transform the petrochemicals business model
By John Richardson ANYONE who has anything to do with the petrochemicals industry or anything to do with the global economy, in other words all of us, needs to pay close attention to the above chart and what it is telling us. This once again demonstrates the enormous value of the ICIS Supply & Demand […]