By John Richardson CHINA’S synthetic fibres chain continues to show serious signs of distress as a result of weak domestic and export demand, according to my ICIS colleagues, Judith Wang and Becky Zhang. Traders in monoethylene glycol (MEG) must have believed the theory that petrochemicals demand growth in general would be strong, as inventory levels in Chinese ports […]
Asian Chemical Connections
Depressed China Demand Continues
By John Richardson ANOTHER week and sadly a repeat of the same old story: Depressed polyolefins demand in China. Pricing did, however, increase – by $10-50/tonne in the case of polyethylene (PE) and $10-40/tonne for polypropylene (PP), according to assessments by ICIS pricing for the week ending 16 March. But our colleagues at ICIS […]
Inventories And Price Recoveries
By John Richardson THE role of inventory management in European petrochemical price recoveries needs to be re-examined, given persistently weak underlying economic fundamentals. In Europe, as this ICIS Insight article from my colleague Mark Victory points out, benzene contract prices have risen by 40%, propylene contracts have increased by 20% and ethylene contract prices by 21 […]
Oil Prices And Demand Destruction
By John Richardson THE danger that high oil prices pose to the global economy, and therefore, of course, petrochemicals demand, has been highlighted by a new report from HSBC. It makes the point that quantitative easing, which has led to investors fleeing a weaker dollar into commodities, is a major contributory factor behind the rally […]
China Auto Sales Point To Long-term Shift
By John Richardson The impact of Chinese government policy adjustments on petrochemicals demand was further highlighted late last week, when auto-sales figures for January-February were released. Sales declined by 4.4 percent, the worst two-month start for the industry in seven years, with local-brand sales falling by 17 percent. This is sure to dampen the mood […]
PE Margins Lowest On Record
By John Richardson ANOTHER week has gone by with no evidence of significantly stronger polyethylene (PE) volumes in China. Rising labour costs, because of mandated government increases in minimum wages, and the shortages of labour post-Lunar New Year, are still making it difficult for plastic converters to run at full capacity. The recovery in pricing […]
Butadiene An Extreme Example
By John Richardson BUTADIENE is an extreme example of what my fellow blogger Paul Hodges described yesterday as happening across several major petrochemicals markets. Panicky buyers have, just as they did last year, “bought forward” in the hope that by so doing they will hedge against even higher feedstock costs in the future. But this […]
Confidence Is Often Relative
By John Richardson CONFIDENCE can be very relative. So, compared with late Q4 last year when global cracker and derivatives markets ground to a virtual halt, perhaps it was inevitable that January would see some kind of rebound in the industry’s mood. Deep operating rate cuts in Northeast Asia have been a factor behind this […]
Seeing Through The Smokescreens
By John Richardson CHEMICALS traders and the financial community, quite obviously, benefit enormously from volatility. Thus we have seen certain chemicals markets being talked-up by the trading community on the basis that the post-Lunar New Year period will see a surge in demand. Equally, the job of the financial community at the moment is to […]
Five Essentials For Planners
By John Richardson POLYETHYLENE (PE) industry planners need to factor in the following as they prepare for 2012: 1.) Oil prices are causing demand destruction in the global economy. They could go higher due to the Iranian nuclear crisis. In real dollar terms, as fellow blogger Paul Hodges has written, crude prices were the highest […]
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