By John Richardson THE proven approach for success in petrochemicals is, of course, to find cheap feedstocks somewhere and build a world-scale cracker complex. That “somewhere” doesn’t necessarily have to be close to the final customers in emerging markets. For example, the Middle East and more more recently the US can afford to ship large […]
Asian Chemical Connections
China PE Market Strength Questioned
Dear blog reader – a technical error, beyond our control, means that we are unable to upload the tables and graphs for today’s post. Watch out next week, as, when the problem has been solved, we will add the missing tables and graphs. Apologies…. By John Richardson THE sustainability of the strength in China’s […]
Global Petchem Markets Turn Bearish
By John Richardson EXCESSIVE inventory building down all the major petrochemical value chains is a global rather than just a Chinese problem, according to Paul Satchell – the UK-based chemicals analyst with global investment bank Canaccord Genuity in his latest Volume Proxy research note. “The Volume Proxy continues to decline, with the index now in clear […]
China PE Imports: A Long-Term Outlook
By John Richardson THE chart below is worth revisiting, and pondering again, as we attempt to assess the future of polyethylene (PE) exports to China. In the case of the Middle East, as the chart shows, it has been a case of “so far so good” in 2013. Overall PE import volumes from the […]
Irrationality And Staying Solvency
By John Richardson JOHN Maynard Keynes, the famous economist and speculator , once said “the market can stay irrational longer than you can stay solvent.” In other words, if you are a trader you can sit around for ages waiting for the fundamentals to drive any particular market, and, as a result, go bust – […]
New Consensus Builds On Ethylene Supply Gap
By John Richardson THERE seems to be a new consensus emerging over an ethylene capacity addition shortage between 2013 and 2017. Many of the projects that are supposed to come on-stream during that period will either be delayed, or perhaps might even be cancelled, think a growing number of people. The future of some of […]
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 […]
China Commodities Rally About Protecting Existing Debt
By John Richardson OVER the last few days we have focused on the increased risk-on trade in commodities, including petrochemicals. But maybe the rallies we have seen in products such as fibre intermediates and polyethylene (PE) are mainly about traders being forced to increase their risk profiles in order to protect existing liquidity. Here is the […]
China Export And Import Data May Obscure The Real Picture
By John Richardson CONFUSED? Perhaps, as was definitely the case last Friday, you shouldn’t be. The thrilled reaction of financial markets to the release of China’s July export and import data needs to be put into the context of it being one positive set of data in a long-running series of negative data. On the […]
The Great Polyethylene Mystery Hunt Continues
By John Richardson REPORTS of soaring apparent polyethylene (PE) demand (imports plus domestic production) in China continue as the search also persists for an explanation, given the country’s weak macro-economic environment. Last week we wrote of a 13% increase in demand in January-June of this year compared with the same months in 2011, based on data […]
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