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China PE Growth At Only 4%

By John Richardson CHINA’s polyethylene (PE) demand growth was up just 4% in January-October of this year compared with the same period in 2010, as the chart above from Global Trade Information Services (GTIS) indicates. And yet in January, many of the people the blog spoke to were confidently predicting double-digit demand growth for 2012. […]

Northeast Asian PE Margins At Record Low

By John Richardson THE above slide shows how bad the polyethylene (PE) market has been in 2012. Based on data from the ICIS pricing Asian PE Margin Report, it shows how Northeast Asian high-density (HDPE) integrated variable cost margins have fallen to their lowest level since 2000. This was supposed to be a good year, […]

Weak PE Margins Reflect Big Picture

By John Richardson BEFORE we look at last week’s political handover in China in more detail tomorrow, while on Friday we will return to our theme of Asian demographics, the above slide illustrates what the big picture has meant for the polyethylene (PE) industry. As you can see, variable-cost margins for Northeast Asian producers fell […]

Asian PE Recovery On “China Turning Point”

By John Richardson ASIAN polyethylene (PE) prices rose by $10-30/tonne for the week ending 9 November in response to reports of low inventories, according to ICIS. A further improvement in the market is anticipated by one trader, as a result of the release of raft of positive Chinese economic data last Friday. This is based on the […]

China PE Imports Rise On Recovery Theory

By John Richardson A SURGE in polyethylene (PE) shipments to China has exerted further stress on a market that continues to perform exceptionally badly. Total PE imports in August (the latest figures availabe) rose to 817,277 tonnes from 681,100 tonnes in July. Low-density PE (LDPE) shipments rose by 27%, high-density (HDPE) by 21% and linear low-density […]

Managing European Volatility

By John Richardson THE blog was in Amsterdam this week for an ICIS training event involving delegates who were European chemicals and polymer buyers. They had one overriding question for us: “How on earth do we manage the extreme volatility in our raw-material costs?” The answer we gave was to not confuse oil-price driven temporary surges […]

Real Demand In The Real Economy

By John Richardson THE FED’S decision to launch quantitative easing 3 (QE3), a series of open-ended steps more radical than anything it has attempted before, is bound to drive petrochemicals pricing higher, in response to the surging cost of crude. But as a corporate planner with a US polyolefins producer told us yesterday, before the […]

“Good News” Over China Bank Lending

By John Richardson CHINA’S new local currency lending rose to 703.9 billion Yuan ($111 billion) last month, way ahead of July’s 540.1 billion Yuan. If a you are trader in the Dalian Commodity Exchange’s futures contract in linear-low density (LLDPE) you can take this ostensibly encouraging number, and premier Wen Jiabao’s speech earlier this week about […]

China PE Demand Weakness Continues

 By John Richardson LET’S put this into context: China’s polyethylene (PE) demand grew by 53 percent in 2008-2010. Growth during the first seven months of this year was just 1.7 percent over Januuary-July 2011, according to Global Trade Information Services (GTIS). And when compared with the same seven months in 2010 growth was flat, as the […]

Dysfunctional Oil Markets

By John Richardson “HOW do a I tell my customers that polyethylene (PE) price rises are justified by more expensive naphtha, when the market is so weak?” asked an Asia-based sales and marketing executive with a major producer earlier this month. A second executive with another producer, who has responsibility for the China market, expressed […]

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