By John Richardson WHEN stock markets are rising, the proverbial garden can look as if it is blooming with summer flowers without a weed in sight. But the underlying data suggest wealth inequality is still a major issue in the US, with the inequality creating iconoclastic politics in the US that continue to threaten a […]
Asian Chemical Connections
China’s Polyethylene Market: Three New Scenarios For 2018-2025
By John Richardson THE above slide underlines the growing complexity surrounding China’s economy, politics, society, environmental policies and trading relationship with the US. I’ve placed this complexity in the context of the implications for the polyethylene (PE) industry. The above slide, and the full explanation below, updates my three scenarios from last September. These new […]
Plastic Waste Crisis: How Polymer Company Early Adopters Can Win
Being an “early adopter” is never easy because of cynicism and scepticism. But what choice do we polymer companies have? None, if they really want to protect their revenues. By John Richardson POLYMER companies will lose billions of euros and dollars in revenue unless they react in the right way to the global plastics […]
The Battle To Retain Metallocene Polyethylene Price Premiums
By John Richardson THE ABOVE chart could be a sign of a long term trend where we see metallocene linear-low density polyethylene (LLDPE) price premiums over standard, or C4 grade, LLDPE film at lower levels. We have already seen C6 metallocene premiums in Southeast Asia slip ever so slightly to an average of $113/tonne from […]
Asian Petchems Profits Could Test Historic Lows In 2018
By John Richardson THE ASIAN steam cracker business has struggled to pass on higher oil prices as the above chart further underlines. As you can see, high-density polyethylene (LLDPE) injection grade spreads including selected co-products have slipped over the last few months. Spreads are a rough but still useful measure of profitability, and so tell […]
Asian Naphtha Cracker Spreads To Fall By 50% In 2018
By John Richardson ASIAN naphtha cracker operators will see a 50% decline in average spreads, or differentials, between their raw-material costs and finished product prices in 2018 compared with last year, according to my forecasts in the above chart. This will be the result of a further steep rise in oil prices and increased polyethylene […]
China’s Plastic Clean-Up Threatens Polymer Growth Assumptions
Last week saw the release of an EU Plastics Strategy which aims to make packaging plastics 100% recyclable in the EU by 2030. China is also moving in the same direction, as I discuss below – and this doesn’t just apply to its well-publicised ban on imported scrap plastic. Domestically-produced plastic waste is also being […]
Struggling Polyethylene In 2018, Strong Profits Elsewhere
By John Richardson THERE will perhaps be two headline directions for the global chemicals and polymers industries in 2018: I believe that the global polyethylene (PE) market has a very good chance of moving from last year’s peak margins to levels of profitability below what is expected by most companies, investors and analysts. China’s ongoing […]
Asian Naphtha-PE Spreads Collapse By 80% As 2018 Challenges Build
By John Richardson ASIAN naphtha-to-polyethylene (PE) spreads collapsed by 80% in the first week of January compared with December last year because of the failure to pass on the rise in naphtha feedstock costs resulting from higher oil prices. In an update of the chart I’ve been running since late last year, what you see […]
US-China Trade Relations In 2018: Prepare For The Worst
By John Richardson WE GOT away with it in 2017 by luck rather than design, as there is of course very little that petrochemicals and polymers companies can do to prevent a global trade war other than lobbying politicians. Part of the reason for the lucky escape was the warmth of the Trump-Xi meeting in […]