By John Richardson HERE are some sobering statistics that mainstream politicians and economic policymakers should take note of: The real, inflation-adjusted incomes of two-thirds of households in 25 advanced economies were flat or fell between 2005 and 2014 compared with just 2% in the previous decade. Only in London and the southeast region of the […]
Asian Chemical Connections
Polyethylene: A World Turned Upside Down
By John Richardson THE recent history of polyethylene (PE) shows a global competitive landscape very different from that which most people expected two years ago. Two years ago, we were told that the natural price for oil was $100/bbl because of limited supply and robust demand growth. The consensus view was also that whilst costly oil meant that […]
How To Battle For Value In Oversupplied Markets
By John Richardson FOR the moment all is good, as the chart above illustrates, which details the premiums that C6 metallocene-grade linear-low density (LLDPE) have enjoyed over standard commodity grade C4 LLDPE in the key China market. The October 2010 start date in the chart is when we began our C6 assessment (we don’t assess […]
Oil Below $30, Trade Barriers Etc: Implications for US Polyethylene
By John Richardson FOUR years ago it seemed like an absolute “no brainer”. Just about everyone thought that China’s economy was going to expand at double digit annual rates, virtually forever. You also had the surge in ethane availability in the US, thanks to the shale gas revolution, oil prices which most people thought had […]
Asian Polyethylene: Challenge The New Paradigm
By John Richardson IT would be very interesting to go back to 2000 and compare the strength of positive sentiment towards the future of the Asian polyethylene (PE) industry to the above chart. The chart shows spreads between naphtha costs, which is the main feedstock for making PE in Asia, and the prices for one […]
The Risks Ahead For Polyethylene
By John Richardson TOO many people will look at the chart on the left and think, “Crisis? What crisis?” But glance to the right for what it is like in another petrochemicals value chain. What is happening on the right could sooner than you think be happening on the left: The polyethylene (PE) value chain […]
Polyethylene The “Last Man Standing”. For How Much Longer?
By John Richardson POLYETHYLENE (PE) remains almost the “last man standing”. Whereas most of the other chemicals and polymers markets in China, including phenol, polyvinyl chloride and purified terephthalic acid, are mired in almost vanished imports and poor profitability because of severe oversupply, PE appears to be fine. Take the latest import and local production […]
Changing Demand Is Demanding Better Answers
By John Richardson I HAVE spent the last two weeks travelling in the Middle East, Southeast Asia and Northeast Asia and during that time, I didn’t meet one senior petrochemicals industry executive who talked in detail about demand. Instead, the focus of just about everything they wanted to discuss was supply. The big question on […]
Polyethylene Is Just Another Commodity – It Is Nothing Special
By John Richardson THERE is a story circulating out there that polyethylene (PE) is a “special commodity” in that it is not tied to the downturn in other commodities that we have seen over the last year. Whilst most people are coming around to the sensibel view that iron ore demand growth will never be […]
Global Polyethylene: The Bubble Continues To Burst
By John Richardson THERE are further reasons to believe that the bubble continues to burst for much of the global polyethylene (PE) industry, after what has been a misleadingly strong first half of the year. US ethylene capacity and production are on the increase as production issues lessen and as the US prepares to also […]
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