By John Richardson IT COULD be a game of chicken designed to pull Russia back to the negotiating table and the Saudis might win the game. This is how you could be interpreting the Saudi decision to raise oil production and offer aggressive discounts to customers following last week’s failure by OPEC to agree cuts […]
Asian Chemical Connections
Global polyethylene demand in 2020 at risk of 2.4m decline because of coronavirus
By John Richardson I AM a bit confused this morning following some excitement about the Chinese decision to allow polyethylene (PE) importers to apply for exemptions from the 25% additional tariffs on US high-density (HDPE) and linear-low density PE (LLDPE) that have been in place since August 2018. One of my contacts for instance sent […]
Why coronavirus will be a much bigger deal for petrochemicals than SARS
By John Richardson THE WORLD was very different in 2003 when SARS struck. Back then, China accounted for just 4% of the global economy but last year this had risen to 17%. The US was also the biggest source of global economic growth 17 years ago. China has since overtaken the US to become the […]
China 2020 polyethylene demand 4.1m tonnes lower on single-use plastics ban and coronavirus
By John Richardson CHINA was supposed to be the one polyethylene (PE) market we could all depend on during a period of unprecedented oversupply. This is no longer the case. As I discussed last week, 2019 could well have been another stellar year for the country’s demand growth with consumption of PE at some 33.9m […]
China single-use plastic bans: Polyethylene imports 68m tonnes lower in 2020-2030
By John Richardson THE good news from a “business as usual” perspective is that China’s polyethylene (PE) demand might have exceeded our expectations in 2019 by some 800,000 tonnes. Preliminary discussions with my contacts point towards growth of 10% in 2019 over last year rather than our forecast of 7.8% as a result of continued […]
China’s bans on single-use plastics: The impact on polyethylene demand
By John Richardson DON’T SAY I didn’t tell you. It has always been just a question of time before China took its plastic rubbish crisis very seriously, as I argued in an April 2019 blog post: It seems clear that plastics rubbish will become a major focus of the Chinese government, affecting all […]
Why the trade deal is much ado about almost nothing
These are, as always, my personal views and do not express the views of ICIS. Thanks By John Richardson RELATIONSHIPS between the US and China reached a major low point in May 2018 when details of the full scale of US demands were leaked to the Chinese. They required China to abandon its economic growth […]
Higher Asian ethylene and polyethylene prices do not mean we are past the bottom of the downcycle
By John Richardson THE RISE in Asian spot ethylene prices is being cited as evidence of better downstream polyethylene (PE) supply and demand fundamentals. I am not convinced, partly because the ethylene spot market in Asia is so thinly traded that a myriad of unrelated factors could be behind the recent price increases. PE prices […]
Why President Trump, unlike with Iran, will find it harder to shift course on China
As always, these are my personal views only and do not represent the views of ICIS. Thank you By John Richardson A WILLINGNESS to change policy direction in almost the blink of an eye is one of the messages from this week’s geopolitical chaos. When many of us thought the US was about to […]
US and Iran conflict in a world of declining growth and fragile supply chains
By John Richardson THINK of the Fukushima disaster in 2011 and multiply its impact on global supply chains by at least a factor of ten. Then place the supply disruptions from the US and Iran conflict into the context of an already weakening global economy and you can begin to grasp the risks ahead. The […]