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 […]
Asian Chemical Connections
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 […]
Global Polyethylene Margin Picture
By John Richardson ASIAN high-density polyethylene (HDPE) margins have improved in June and July compared with the rest of the year, according to the above chart from the ICIS Weekly PE Margin Report. But the overall year-to-date trend illustrates how the industry has lacked pricing power as a result of persistently weak Chinese demand. August […]
Polyolefin Demand Remains “Very Weak”
By John Richardson DEMAND remains “very weak” in China’s polyolefins markets, said a sales and marketing executive with a major Western producer. “I am having real trouble justifying higher prices to my customers, which are partly the result of naphtha having risen in line with stronger crude. What they cannot understand is why crude […]
China’s Unreliable GDP Data
By John Richardson THE economic slowdown throughout Asia became more apparent last week with the release of disappointing data, prompting interest rate cuts in China, Vietnam and South Korea. China’s key polyethylene (PE) market responded as trading volumes fell and sentiment weakened for the week ending 13 July, according to ICIS. Market participants, however, expressed […]
June China Lending Disappoints
By John Richardson POLYETHYLENE (PE) and polypropylene (PP) offer prices were reportedly on the rise across Asia earlier this week on increasing geopolitical tensions over Iran that led to a hike in crude prices. “Butene-grade linear-low density (LLDPE) offers have increased by $40-50/tonne,” said a source with a major producer. September LLDPE futures contract […]
China’s Luxury Goods Risk
By John Richardson THE “luxury end” of China’s polyethylene (PE) market is being heavily targeted by overseas producers and the results so far have been pretty spectacular, according to one of the producers. “The annual growth in demand for higher value grades has been tremendous – two times GDP,” said a senior executive with […]
US Chemicals Slowdown
US PE contract pricesBy John Richardson THE American Chemistry Council’s Mid-Year Situation and Outlook Report, which was released this week, helps explain the background to the weakness in demand seen in the US polyethylene (PE) market. What goes for PE will, of course, apply to the rest of the US petrochemicals business. In the case […]
China Still Destocking
By John Richardson A NEW report from HSBC supports our argument that China’s synthetic resin market has yet to bottom out. Big structural changes in China’s economy are an additional factor, in our view, to the slowdown in China not covered in the comments below. The bank highlights, of course, the weak business environment […]
US Polyethylene Targets China
By John Richardson SIGNIFICANT volumes of US polyethylene (PE) are heading to China as the States attempts to compensate for weaker domestic sales, understands the blog. Despite the fall in US prices, margins remain strong, creating arbitrage opportunities. US May contracts for polyethylene (PE) settled down by 7 cents/lb ($154/tonne, €125/tonne) from April, following […]
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