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Asian Chemical Connections

All At Stake And At Sea For October

A bit like the fund managers who are anxious to keep the equities rallies going until the end of the year in order to protect bonuses, there must be a lot of petrochemicals people hoping pricing in our sector will stay equally firm. Perhaps, though, these hopes will be more inspired by job preservation rather […]

How do Asian cracker operators compete?

Source of Picture: www.autospies.com Not an easy answer and not one much suited to a few paragraphs of blogging. But here’s one thought as the competitive environment becomes a great deal more difficult due to new Middle East capacity and the potential for China to move towards self-sufficiency in polyethylene and polypropylene: Have a chat […]

The Philippines: Left With the Crumbs

“Here’s your entire allocation for this month” Source of Picture: Adammakwright.wordpress In the words of a plastics converter from the Philippines: “Markets are so tight at the moment that we are left to pick up the crumbs. Suppliers are concentrating almost entirely on China.” The converters have been waiting for so long for the great […]

Excessive Confidence A Risk

Confidence along all the chemicals value chains is always a key issue because of the ability to aggressively manage inventories, according to the London-based chemicals analyst Paul Satchell. So there’s the ever-present risk of sudden and very disruptive de-stocking. The longer the current rallies in commodity prices and stock markets continue, the greater might be […]

China inventory sentiment survey

Peering through the fog On the theme of data again, in the ideal world it might be possible to send thousands of hardworking foot solders out into the field in China to chase down every warehouse of polymers and count every single pallet of polyolefins. Not not really – don’t talk nonsense; in reality, this […]

Credit Expansion Linked To Dalian Boom?

Source of Picture: http://blogs.suntimes.com/ebert/ We have just started doing our research and so more details later – but see attached this Excel spreadsheet – lendingVDalianOI.xls It compares the increase in lending from China’s banks with the amount of open interest in the Dalian Commodity Exchange’s linear-low density polyethylene (LLDPE) futures contracts. Volume traded on the […]

Another Opinion: China and Recycling

Source of Picture: The Earth Institute at Columbia University I was speaking to a Singapore-based trader this morning over the reasons behind the polyolefin price rally. PPPEPrices2006-Aug09.ppt Here are his views: “A maor factor has been a lack of availability of recycled material. This is because people in the West are buying less durable consumer […]

Asia Polyolefins: “Bloodbath” Postponed

Source of Picture : purchasing.com In his own words, here is how one contact describes the current situation with a couple of extra points added by yours truly (with links) “We’ve seen arbitrage close from Europe on polyolefins with no new business since April-May. Some material was delivered in June but this was merely May […]

Dalian LLDPE futures explained?

My last blog entry quoted a North American industry source who was concerned over the potential for physical delivery on the Dalian futures exchange to flood the real market and send prices crashing. In my ignorance of how futures markets works, and as a typicaql semi-numerate journalist, I therefore asked a colleague with a futures/mathematical […]

Basell predicts tough times for polyolefins in 2009-10

Paul Cherry of Basell gave an excellent paper at the recent ICIS Olefins Conference – Download file Paul offers some hints on how to survive the next downturn, and provides some sobering predictions on operating rates. I bet that after 2009-10, or whenever the next downturn arrives, South Korea, Taiwan and Japan will further restructure. […]

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