…..and that’s assuming there is no trade war with China! By John Richardson THE MORE you dig into the data the more it seems that the US might struggle to find a comfortable home for all of its new polyethylene (PE) production, even without a trade war with China. Using linear low-density PE (LLDPE) as […]
Asian Chemical Connections
Acrylonitrile butadiene styrene trade war disruptions
By John Richardson BECAUSE CHINA is such a dominant player in finished goods manufacturing, US tariffs on Chinese imports as part of the trade war will have major negative effects upstream across a wide range of petrochemicals and polymers and across a wide range of countries. The reason is of course that petrochemicals are needed […]
US styrene another petchems sector at risk from trade war
By John Richardson THE US decision to pick a fight with China over trade and geopolitical influence could backfire very badly from the perspective of new US investments in petrochemicals capacity – most notably polyethylene (PE) and ethylene glycols (EG). The data tell is that many billions of dollars of investments in new plants will […]
Middle East, India, SEA petchems winners in new trading blocs
By John Richardson JACK MA, the founder of Alibaba, said of the US/China trade war, “It’s going to last a long time, maybe 20 years. It’s going to be a mess. It’s not a trade war, it’s about competition between two countries.” I believe that the world is set to be split into two trading blocs, […]
How Lehman Bros reshaped China and the global PE business
By John Richardson MOST of the analysis on the tenth anniversary of the Global Financial Crisis (GFC) focuses on the effects on Western economies and societies. Economic inequality has risen since 2008 resulting in the rise of populist politics, is a very common theme. But almost entirely overlooked is the huge effect that the GFC […]
US and China heading towards a new Cold War
That didn’t last long – , in fact, less than 24 hours,, when, as far stock markets were concerned, it felt as if US/China trade tensions had eased. In a tweet, President Trump has now raised questions about whether any new trade talks between the US and China will go ahead. And even if the […]
US/China trade war will escalate even if new tariffs are delayed
By John Richardson BY LATER today we may or may not know whether President Trump will proceed with threats to impose a further $200bn worth of tariffs against Chinese imports. This decision is of critical importance to the global chemicals and polymers industries. The go-ahead would mark a major acceleration in the trade war – […]
US ethylene glycols: The Cost Of Exclusion From China
By John Richardson IF THE US were unable to export ethylene glycols (EG) to China the economic logic of US capacity expansions would face major challenges. Between 2018 and 2025, China will account for no less than 84% of global net imports (imports minus exports) amongst the major importing regions and countries. (For those who […]
US Economic Strength Of Little Benefit To Global Polyolefins
By John Richardson THE BETTER that things get in the US (provided you own equities and are not on a zero-hours contract) the worse things become in emerging markets. Despite a weaker greenback on a trade-weighted basis, the investor sell-off in emerging markets continued last Thursday, wrote Bloomberg in this article. The Lira was for […]
PE Margins Fall As Trade War Threatens Two Entirely Separate Trading Blocks
By John Richardson LET’S FIRST of all take a close look at what the above chart is telling us about the damage already done to polyethylene (PE) margins before considering what could happen next. US high-density PE (HDPE) margins are 47% lower in the year-to-date versus to 2017 and low-density (LDPE) margins are 45% lower. […]