By John Richardson WHEN people talk about supply it is very often because it is much easier to quantify than demand when, in fact, it is demand that’s the real problem. This is the case today in the global polyethylene (PE) market where the focus is on the big slug of new US supply hitting […]
Asian Chemical Connections
China’s polyethylene demand in 2019 now at risk as slowdown gathers momentum
By John Richardson JUST when most of us thought we had figured out China’s polyethylene (PE) market, its ambiguities and complexities could again be about to come back and bite us. I am beginning to think that 2019 demand growth may not be as robust as I had thought would be the case only two weeks […]
China real estate a growing stress point for global chemicals demand
By John Richardson WE ALL know, or at least we all should know, just how important is the Chinese economy to the global economy. Assume significantly weaker-than-consensus Chinese demand growth in everything from base chemicals to autos, smartphones and TVs, and there is no statistical basis for believing that strong growth in other regions can […]
China PE spreads at seven-year low indicates too many eggs in one basket
By John Richardson CHINA polyethylene (PE) spreads over naphtha feedstock costs are at a seven-year low and I believe that spreads will continue to decline to below their 2012 levels –a year which marked the last major industry profitability downturn (see the above chart). You might want to argue that this has to do with […]
Vietnam PE demand booms on trade war, but for how much longer?
By John Richardson GLOBAL manufacturing supply chains are adjusting to the US tariffs against China, accelerating a process that began a decade or so ago because of China’s ageing population versus more youthful populations elsewhere. Let’s use Vietnam as an example to first of all examine the longer term drift away from China. Since 2010, […]
Plastics pollution crisis: Impact on polyethylene margins in 2022-2027
By John Richardson ALMOST all countries late last week signed a UN deal to monitor the flow of hard-to-recycle plastics to poorer countries. The US was amongst the few countries which declined to sign the agreement. The deal is the result of the increase in contaminated plastic waste exports to Indonesia, Malaysia and Vietnam etc. […]
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. […]
China inland polyethylene growth: The big unanswered question
By John Richardson IF China played an insignificant role in global polyethylene (PE) demand the above chart would not matter. Few people would care about the latent potential of China’s 21 relatively poor mainland provinces if China were as unimportant as India and the Asia & Pacific region. “Surely not? India and Asia & Pacific […]
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 […]