By John Richardson THE ABOVE chart should give you pause for thought if you believe that the Chinese economy is already recovering as a result of major new economic stimulus. This once again points to the value of chemicals and polymers as leading indicators of economic activity. A recovery might be around the corner thanks […]
Asian Chemical Connections
A tale of two polymers in China: ICIS 8th World Polyolefins Conference presentation
WE HELD our 8th World Polyolefins Conference in Vienna last week where I presented this paper on the China market. Polymers that go into durable end-use applications in China, such as PP, are more vulnerable to credit cycles and the decline in GDP growth than is the case with polymers such as PE. PE is […]
China chemicals storage at bursting point indicates no big new economic stimulus
By John Richardson CHEMICALS markets are a great barometer for weather conditions in the wider economy because they are upstream of so many manufacturing industries. We should therefore take close notice of the above chart, from this excellent article by my ICIS colleague, Yvonne Shi. What the chart shows is that by mid-March, weekly inventory […]
Growth in China second hand car market driven by ageing population
By John Richardson CHINA will become a country of a billion plus Western-style middle class consumers is what many people have been telling us for many years. Its unstoppable economic rise involves hundreds of millions more Chinese rising out of poverty as the economic boom moves steadily westwards into its poorer regions, is the popular […]
Per capita consumption another blunt tool for predicting China polymers growth
By John Richardson WE ALREADY know that forecasting Chinese polyethylene (PE) demand growth based on multiples of GDP doesn’t work. This is almost certainly the case with all the other polymers. As discussed last week, the problem starts with the forecasts for GDP growth. They will be inflated for political reasons. A new Brookings Institution […]
China’s January credit surge: Case for one-off panic, no new global economic boom
By John Richardson CHINA’S HUGE January credit increase might be the start of a new round of major credit-fuelled economic stimulus, was the theory I put forward last week. This would lead to a rebound in global growth and a surge in worldwide chemicals demand as global growth is about these three things: China, China […]
China’s ageing population could cost 240 million tonnes of polymers demand
By John Richardson THERE was nothing miraculous about the “Chinese economic miracle”. What instead happened was a lucky coincidence of economic reforms and lots and lots of babies. The reforms were led by Deng Xiaoping who in 1978 decided to open up the Chinese economy. But the opening up would not have delivered significant benefits […]
Surge in China lending could lead to global economic rebound, stronger chemicals demand
By John Richardson CHINA may have pressed the panic button again. If the extraordinary rise in January lending is sustained, this would represent the third time in recent history that China has opened the floodgates on new credit. A sustained upswing in lending would obviously result in stronger chemicals pricing, margins and demand. Further upward […]
China slowdown: Loss of 7m tonnes of global PP demand points to new investment model
By John Richardson CHINA’S influence on the world economy has grown to such an extent over the last decade that is now a bigger driver of growth than the US and the EU combined, says Eurizon SLJ Asset Management. The US impact on global GDP shrunk from just over 40% in 1989-1998 to half that […]
China autos and polypropylene: Growth has peaked and will decline
By John Richardson WHAT if the number of new vehicle sales in China reached a long term peak of 28.9m in 2017? What if the declines in sales that we saw in 2018 continue or that at the very best sales remain flat? “Let’s put this in perspective, though. Just look at how the market […]