As always, these are my personal views only and don’t reflect the views of ICIS By John Richardson AT TIMES like this it’s very hard to be dispassionate. Emotions run high on either side of the widening political gulf as the two factions shout ever-more loudly at each other and refuse to listen. This is […]
Asian Chemical Connections
China benzene and its derivatives could see negative growth in 2019
By John Richardson NOW let’s put this all together. My LinkedIn post on Tuesday highlighted how spreads between CFR Japan naphtha feedstock costs and CFR Northeast Asian benzene prices have only been below $100/tonne during three periods since 2000. The first of these occasions coincided with the end of the dot […]
Global polyethylene in 2020: Margins will reach historic lows as new growth model emerges
Here is a first of a series of outlook articles for 2020 where I focus on the risks ahead for the global polyethylene business By John Richardson CHINA’S polyethylene (PE) market will start 2020 with a whimper because of exceptionally high levels of overstocking, which is a reflection of growing global oversupply. In the […]
Asian PE and PP margins at lowest levels in at least five years and will go lower……
By John Richardson NOT since at least the beginning of 2014 have Northeast and Southeast Asian polyethylene (PE) and polypropylene (PP) margins been as low as they were for the week ending 29 November. We only began our margin assessments in 2014 and so last week’s margins may be lowest for an even longer period. […]
Asian polypropylene market heads for major 2020 downturn
By John Richardson THE ASIAN polypropylene (PP) market hasn’t been as bad as the region’s polyethylene (PE) market in 2019 because of much more limited increases in supply. Whereas the PE market has been flooded with new US production, especially in linear-low density PE (LLDPE), increases in PP output have been much lower. Not for […]
China new vehicle sales: A long term decline and what this means for petrochemicals
By John Richardson THE MAINSTREAM view is that there is nothing fundamental about the decline in new vehicle sales in China. Conventional analysis blames the 2018-2019 slump on the 50% cut in value-added taxes on new autos that came to end in December 2017. This brought forward demand as buyers scrambled to beat the end […]
Environmental taxes on US polyethylene shipments to the EU seem inevitable
By John Richardson IT ALL seemed to make perfect sense at the time. Feedstock and financing were incredibly cheap and trade barriers kept falling. Although there were some faint and distant public rumblings about plastic rubbish, most of the public and the majority of legislators were not bothered about the issue. The global economy was […]
The global polyethylene paradigm shift of permanently weaker demand
By John Richardson MALCOLM GLADWELL, in his very thought provoking book The Outliers, writes about what we think is gut instinct, but is instead the result of a minimum of 10,000 hours of doing something: Sub-conscious expertise that tells us how to think and react in most situations because we’ve been here before. So, when […]
Vietnam polyethylene demand boom may not last because of infrastructure pressures
By John Richardson LET’S start with some good news: Vietnamese polyethylene (PE) demand looks set to grow by 16% in 2019 over last year compared with our base-case assumption of 8%. This would deliver 131,000 tonnes of demand more than we have forecast (see the above chart on the left). Note that the same surely […]
Shift in supply chains away from China adds costs, complexities and risks for petrochemicals
By John Richardson AS PETROCHEMICALS and other manufacturers scramble to relocate their businesses away from China in order to compensate for the trade war, they are discovering that there can be no replacement for China. China has been building up its global manufacturing dominance since as early as the 1980s. In the process it has […]