By John Richardson CHINA’S apparent demand (*see note below) for styrene in 2018 looks set to have increased by just 2.5% over the previous year. This would be the lowest percentage growth and the smallest addition of new demand in tonnes since 2012. This would compare with our earlier estimate of real demand growth of […]
Asian Chemical Connections
Trade war fears return as US LLDPE becomes more exposed to China
By John Richardson THE ground has shifted under our feet once again. Just as it seemed as if the US and China would complete a trade deal by the 2 March deadline, the prospects of an agreement have suddenly diminished. This is the result of the Trump administration declining an offer from two Chinese vice-ministers […]
US/China trade deal in March would likely quickly unravel
By John Richardson YOU CAN bet on a rally in equity markets and in oil prices if some kind of deal is announced by the US and China over their trade dispute by the 1 March deadline. But we could be back to Square One if a deal is then picked apart by President Trump’s […]
The world in 2019: Social unrest, populist politics, trade barriers and global recession
By John Richardson I PREDICTED in 2011 that the world would by a decade later be less globalised as a result of new trade barriers erected by populist politicians. Nature abhors a vacuum and so vacuums in nature are quickly filled. The same applies to politics and society. I warned that the failure to address […]
Iran-China PE trade and the sanctions: short term dip but long term big increase
By John Richardson IRANIAN exports of PE to China will likely suffer a temporary decline because of financing and logistics problems resulting from the new US sanctions against Iran. The US dollar now needs to be entirely avoided with trade needing to migrate to the yuan, the euro and other currencies. And as my ICIS […]
US GDP growth peaks as economic challenges build
A FULL two percentage points of US third quarter growth of 3.5% was down to stock building. Total US inventories grew by $76bn in Q3 following a $37bn contraction in the second quarter. The fourth quarter is always a period of destocking in the US and everywhere. This will combine with the big build-up in […]
China PP growth at risk from lower auto sales, trade war
By John Richardson WE EXPECT China’s PP demand to rise by 6.5% in 2018 to total consumption of 27.8m tonnes. We then expect a further increase of 6% to 29.3m tonnes next year. It is too early to say for certain, but there is a risk that 2018 and 2019 PP demand growth will be […]
PE margins turn negative as economic risks build
By John Richardson CASH margins for Asian linear-low density polyethylene (LLDPE) for naphtha-based producers have turned negative for the first time since Q1 2015, according to an industry contact. And this is of course before the flood of new US LLDPE production arrives in Asia. No matter how you crunch the numbers, the likely increase […]
Bursting of the US debt bubble and effect on petchems
By John Richardson THE US economy is in a debt-induced bubble that will sooner or later burst with of course major negative consequences for the rest of the world. You cannot print babies. The huge amounts of money that the US Federal Reserve has pumped into the US economy since 2008 combined with last year’s […]
China’s time poor, cash rich will want less PP and not more
By John Richardson LAST month I gave you the downside of urbanisation in China and how this could result in 7m tonnes of lower polyethylene (PE) demand in 2030 than we assume in our base case. A very good contact of mine has however pointed out this fascinating article from the World Economic Forum on […]