By John Richardson CHINA WILL do what suits China and not what suits the rest of the petrochemicals and polymers word. And what suits China has radically changed because of the new US approach to international relations. No longer can China depend on the US, or indeed any other country, for the petrochemicals imports it […]
Asian Chemical Connections
China MEG spreads turn negative on 171% rise in US retail prices for Chinese clothing
By John Richardson THERE are a lot of theories out there about why the spreads between Chinese mono-ethylene glycols (MEG) prices and naphtha feedstock costs have fallen in April and May of this year (see the above chart). But as I shall explain in detail later on, the only explanations that entirely stand up are […]
China benzene spreads at ten-year low on misplaced trade deal hopes
By John Richardson THE ABOVE chart shows that in April the average spread between CFR Japan naphtha feedstock costs and CFR Northeast Asia (NEA) benzene prices was just $19/tonne, its lowest level since January 2009 during the Global Economic Crisis. AS with Doctor Copper, benzene is a major raw materials building block for many manufacturing […]
Longer trade war: Impact in numbers on China polymers demand
By John Richardson WE MUST now start to quantify the impact on the petrochemicals industry of no end to the US/China trade war during 2019. Economists at Barclays estimate that a 25% US tariff on $200bn of exports could cut Chinese growth by half a percentage point over 12 months, and as much again if […]
China PE demand boom will not stop further margin declines
By John Richardson CHINA’S polyethylene (PE) market is being temporarily weighed down by overstocking which is the result of the big surge in March imports. Many of the arrivals in March were of material booked late last year when oil and so PE prices were falling, drawing traders and Chinese buyers into major commitments. This […]
President Trump’s Tweets increase risk of no trade deal until 2021
By John Richardson THE PROSPECTS of a trade deal seem to have have faded into the distance as a result of Tweeted threats from President Trump that the US will raise tariffs to 25% from 10% on $200bn worth of Chinese imports, including several chemicals and plastics. The increase would happen on Friday, he said. […]
Pressure on US builds as PE exports to China tumble and EU considers tariffs
By John Richardson DONALD TRUMP insisted in early March that he was willing to walk away from a bad trade deal with China. But it now appears that the US is prepared to water down its demands in the interests of getting a deal done. The above chart helps to explain why. The first bar […]
Weak China polypropylene demand in January-April indicates no big new economic stimulus
By John Richardson THE ABOVE chart should give you pause for thought if you believe that the Chinese economy is already recovering as a result of major new economic stimulus. This once again points to the value of chemicals and polymers as leading indicators of economic activity. A recovery might be around the corner thanks […]
A tale of two polymers in China: ICIS 8th World Polyolefins Conference presentation
WE HELD our 8th World Polyolefins Conference in Vienna last week where I presented this paper on the China market. Polymers that go into durable end-use applications in China, such as PP, are more vulnerable to credit cycles and the decline in GDP growth than is the case with polymers such as PE. PE is […]
A brand new ‘how to” guide for forecasting Chinese polyethylene demand
By John Richardson TIME and again over the last ten years the strength or weakness of Chinese chemicals and polymers demand has taken everyone by surprise. One method of analysis that does hold considerable value as a methodology for forecasting growth might be predictions of future credit flows for some chemicals. The big uptick in […]