By John Richardson Sometimes a simple chart is worth hundreds of words. A lot less than hundreds of words today, therefore, as you consider the above chart and these two key questions: If the global economy was that strong, and/or petrochemicals industry fundamentals as sound as the consensus view holds, why has there been such […]
Asian Chemical Connections
China Environment Campaign Creates Global Inflation Threat
By John Richardson THE ABOVE chart shows the major role that China has played in driving global inflation, deflation – and now inflation again – since 2008. There is a close link between the movements in China’s Producer Price Index (PPI) and Consumer Price Indices (CPIs) in the Eurozone, the US and the UK. The […]
Crude Drives Asian Polyethylene Spreads To Three-Year Low As 2018 Risks Build
By John Richardson IN MARCH 2016 we gave three scenarios for crude-oil prices: Collapsing Demand where we saw crude falling to $25/bbl on weak global demand that would make it impossible to repay much of the huge debts that had been built up since 2008. This is the result of economic stimulus polices that we maintain […]
Next Polyethylene Downcycle: Risk That History Will Repeat Itself
By John Richardson WE can break the history of the global polyethylene (PE) business so far this century into four major phases, thanks to the above chart, which was compiled with the help of our excellent Supply & Demand Database: 2000-2001: Global polyethylene (PE) operating rates dipped to an average of 81% on the end […]
China Continues Deleveraging With Reforms Set To Accelerate….
…global risks remain elevated and so beware of complacency By John Richardson THE conventional view is that China has stimulated its economy to perfection ahead of the important 19th National Party Congress which begins in Beijing on 18 October. The theory goes that President Xi Jinping has kept the lending spigot firmly open in order […]
China Lending Bubble Adds 4.7m Tonnes To Polyethylene Consumption
By John Richardson THE IMF produced a very interesting study earlier this month, in which it estimated that if it had not been for China’s giant economic stimulus programme the country’s real GDP growth would have averaged only 5.3% per annum during the five years to 2016. Instead, however, the IMF estimates that China’s economy […]
China PP Market Outlook for H2 And 2018
By John Richardson AS IS the case with polyethylene (PE), China’s polypropylene (PP) market continues to catch up with the underlying realities of demand growth. If you recall, in Q1 of this year PP net imports (imports minus exports) grew by no less than 36% over the same period last year to 1.3m tonnes. The […]
Oil Prices: Did You Heed All The Warnings?
By John Richardson THE $30 a barrel price of crude at or below which some Asian naphtha cracker operators could be forced to exit the business is an increasing possibility. Here is why: This January’s stockpile of crude in the US is the highest for more than 80 years, said the US-based Energy Information Administration […]
September 2008: How History Is Repeating Itself
By John Richardson WE know that weak growth in China, Europe and the US will have a major negative impact on the global economy in 2015. But does this really mean a new global financial crisis? Won’t the world’s economy instead just splutter along as it has done, pretty much, since the last crisis in […]
China’s About Turn: The Seven Global Implications
By John Richardson HISTORIANS will end up concluding that falling emerging market currencies and stock markets – the prelude to what could be a full-blown crisis – is really about China and not about the US Federal Reserve. The Fed is just a sideshow to the main event of what is going to drive not […]
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