By John Richardson In yesterday’s world the ongoing geopolitical tensions between Saudi Arabia and Iran would have resulted in a sustained rally in oil prices. But this rally lasted barely couple of days as a result of persistently high US oil stocks and more alarming data emerging from China, such as the biggest-ever decline in […]
Asian Chemical Connections
The Opportunities For 2016 And Beyond Are Huge
A happy festive season and all the best for the New Year to my readers. What should chemicals companies do to be successful in 2016 and beyond. What follows will help. I am taking a break from blogging, but will be back on 3 January. By John Richardson WHAT have we learnt from the last […]
Polyethylene The “Last Man Standing”. For How Much Longer?
By John Richardson POLYETHYLENE (PE) remains almost the “last man standing”. Whereas most of the other chemicals and polymers markets in China, including phenol, polyvinyl chloride and purified terephthalic acid, are mired in almost vanished imports and poor profitability because of severe oversupply, PE appears to be fine. Take the latest import and local production […]
Oil At $25 Or Even Lower By The End Of This Year
By John Richardson AS most people react like a rabbit caught in a car headlight to the latest collapse in crude-oil prices, they need to take note of this: The long term average price of oil, adjusted for inflation, is only $33 a barrel. Why were so many misled into thinking that the natural price […]
Deflation Threatens Asia’s Ethylene-Polyethylene Link
By John Richardson AS you can see from the above chart, ever since April 1997, when we first started providing price quotes for spot Northeast Asian (NEA) high-density polyethylene (HDPE) film grade, it has been spot ethylene rather than spot naphtha prices that have driven HDPE prices. You can find the same pattern for any […]
China Will Continue To Drive Global Deflation
By John Richardson JANET Yellen has firmly signalled that US interest rates will be raised later this month for the first time since 2006. There will be collateral damage, sure, as I discussed in September, most importantly because of the private-sector debt binge in emerging markets resulting from such a long period of record-low US […]
Changing Demand Is Demanding Better Answers
By John Richardson I HAVE spent the last two weeks travelling in the Middle East, Southeast Asia and Northeast Asia and during that time, I didn’t meet one senior petrochemicals industry executive who talked in detail about demand. Instead, the focus of just about everything they wanted to discuss was supply. The big question on […]
Oil Prices: How To Avoid “Rear-View Mirror” Thinking
By John Richardson EARLIER this year I said that crude prices in the region of $30 a barrel were perfectly possible. Now, rather belatedly I feel, Goldman Sachs and other some other analysts are waking up to this possibility, with Goldman even going as far as saying $2o a barrrel is possible. Chemicals companies cannot […]
Deflation, Customer Cost Cutting And Polyolefins
By John Richardson MOST of the world’s top ten chemicals producers reported lower sales for Q3 2015, but saw their profits improve on lower oil prices. Sticking to the sector which I follow closely, which is polyolefins, this is down to a “lag effect”. The collapse of oil and so naphtha costs has not being […]
Saudi Arabia and Oil: A Lesson For Polypropylene
By John Richardson POLYPROPYLENE (PP) producers and their customers, the plastic converters, are on the cusp of a great opportunity. Let’s start with the producers. The potential for low-priced propylene for several years to come will push PP prices down, thus giving PP the chance to gain market share from other polymers such as polystyrene, […]
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