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Asian Chemical Connections

Adjusting Inventories To Lower China Growth

By John Richardson EXCESSIVE inventory building across a range of commodities in China, including  petrochemicals, continues to worry the blog. One reason, as we discussed yesterday, might be that traders are in the midst of a liquidity squeeze as a result of the late June credit crackdown. They have therefore taken out further very-aggressive positions […]

More People Wanting To Buy Than Sell

By John Richardson SOME people in the petrochemicals industry are showing great confidence in the future. Perhaps it is no coincidence that several of these people are said to be Chinese domestic traders in polyethylene (PE) and mono-ethylene glycol (MEG) who might have long positions to protect. But if PE is in genuinely wonderful shape, […]

Asia, The Fed And Swimming Naked

  By John Richardson WHEN the tide eventually goes out, we will find out who has been swimming naked. This will also be the case in several emerging markets, ex-China, when the Fed eventually draws down its stimulus. Hot money seeking higher returns has flowed into India, Indonesia, Thailand, the Philippines and Malaysia, for example, […]

The Complexities Of Benzene

By John Richardson SOMETIMES petrochemicals markets defy reality, on the occasions when pricing moves out-of-synchronicity with the underlying nature of demand. This is the case with benzene today (see the above pricing chart) as my ICIS colleague Truong Mellor describes, in this excellent Insight article. He says that: *European Benzene pricing has been bullish, as […]

Please Be Careful Out There

By John Richardson Quite often, a chart is worth many thousands of words. The above chart, from Bloomberg, shows the divergence between the soaring S&P 500 index and US macro-economic indicators. The theory is that soaring equity values will be the tide that lifts all boats. Even America’s hard-pressed middle classes will benefit, not just […]

Oil Prices Fall, As We Warned

Source: Daily Forex   By John Richardson WE warned on 4 April that real economics threatened a sharp correction in crude-oil prices and it now appears to be happening. “New York’s main contract, West Texas Intermediate for May delivery, closed at $US88.71 a barrel on Monday [15 April], down a hefty $US2.58 from Friday,” wrote The […]

The Real Economies Set To Dominate Q2

By John Richardson Sometimes a picture is worth many thousands of words. The above chart, supplied by one of the blog’s resources analyst contacts in Perth, Western Australia, neatly illustrates the dangerous divergence between real ecoomies and financial markets. As the Nikkei 225 has surged, Arabian Gulf very large crude carrier (VLCC) freight rates to […]

China Demand Worse Than Just Before CNY

By John Richardson CHINA’S demand for polyethylene (PE) is lower than immediately ahead of the February Chinese New Year (CNY) break, said a Singapore-based polyolefins trader. “For demand to be less than just before the New Year, when most traders had already pulled out of the market to avoid cargoes being stranded at ports during […]

“Flabbergasted” By Weak Demand….

….In A Tale Of Three Markets. By John Richardson AS China introduces more measures to clamp down on an overheated property sector and the shadow-banking system, polyethylene (PE) traders regard this latest news cycle as yet another opportunity to go short. “It used to be that the trading business was about supply and demand fundamentals […]

Damage Limitation

By John Richardson POLYETHYLENE (PE) prices crept up by $10-50/tonne for the week ending 22 February, according to ICIS pricing. But, as the above chart shows, integrated high-density PE variable cost margins in Southeast and Northeast Asia remained very weak, and were way below all the other regions – again, up until the week ending […]

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