By John Richardson The greater frequency of extreme weather events presents a huge challenge for chemicals companies. Take Hurricane Harvey and Hurricane Irma as the most obvious current examples. Weather forecasting service AccuWeather writes in this article: This is the first time in the history of record keeping that two Category 4 or higher hurricanes, […]
Asian Chemical Connections
China To Drive 55% Of Global Polyethylene Growth In 2007-2017….
.…Major risks ahead from this over-dependence on China By John Richardson FOLLOWING on from my post on Friday, which showed almost exactly the same story for polypropylene (PP), see the above chart detailing the importance to the global polyethylene (PE) business of China’s consumption growth. Over-exposure to China is a greater risk in the […]
Tumbling Oil Prices: Implications For Asian Polyethylene
By John Richardson DON’T say that I didn’t warn you. Oil prices now look much more likely to hit my forecast of $35//bbl, or lower, by Q4. Such is the downward momentum right now in crude markets that it is perfectly possible that this price level will be breached well before then. As of Tuesday, […]
China Moves Towards Commodity Grade PE Self-Sufficiency By 2025
By John Richardson THE argument I’ve been making for a couple of years now is that the history of petrochemicals in China suggests a constant drive towards much greater self-sufficiency. No value chain is immune, I have kept contending. The recent history of a sharp rise in self-sufficiency in polyvinyl chloride (PVC), purified terephthalic acid […]
China Polyethylene Self-Sufficiency: The Right Questions To Ask
By John Richardson THERE is a lot of talk right now about now China’s coal-to-olefins (CTO) capacity additions are slowing down on rising concerns over the emissions produced by the technology. A further factor behind the widespread view that capacity additions are slowing down is forecasts that CTO margins will weaken over the next few […]
Supply-Driven Petrochemicals Success Under Threat
By John Richardson THE OLD joke goes like this: “If oil and gas exploration is the gorilla, refining the dog and petrochemicals the tail on the dog, what does the gorilla say when he looks at the dog? He says, “I can’t even see the tail on the dog’ ”. The history So events upstream […]
Polyethylene Markets To Become More Regional, Less Global
By John Richardson THE GREAT US author Mark Twain, pictured on the right, needed to pay off his debts. So in May 1897, he was in London during a round-the-world speaking tour designed to raise the money to pay off his debts. People don’t usually turn up to see dead people speak. He was therefore a […]
China Polyethylene Operating Rates To Rise On Govt Policies
By John Richardson EARLIER this month I reported on how China’s state-owned refineries faced increased competition from their domestic private competitors in 2016 in gasoline, diesel, kerosene and other refined-product markets. This forced Sinopec and PetroChina to reduce their overall refinery operating rates, which led to less availability of naphtha for their downstream steam crackers. […]
Donald Trump And The Polyethylene Industry: What Happens Next
By John Richardson EVERYTHING started going very well for the global polyethylene (PE) business from the end of 2014/early 2015 if you look at the spreads, or differentials, between naphtha costs and PE pricing. Spreads are only a blunt instrument to measure real profits. But both spreads and integrated naphtha-based margins have reached historic highs since this turning […]
Polyethylene Pricing, Profits In 2017: Three Scenarios
By John Richardson WE are in entirely uncharted territory because the West looks as if it is about to abandon the economic and geopolitical policy consensus that has been in place since the Second World War. There is, for example, the collateral damage that might well result from the president-elect’s domestic stimulus policies – a […]
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