By John Richardson SAUDI Arabia has offered its main customers in the US, Europe and Asia extra oil supplies until the end of the year as a result of concerns over the impact that expensive crude could have on the global economy. This follows last month’s call from the Group of Seven finance ministers for […]
Asian Chemical Connections
Asia Faces More Asset Bubbles
Marc Faber Source of picture: http://www.cliffkule.com/2011_06_26_archive.html By John Richardson RECENT action by Western central banks will result in more hot money flowing into Asia, creating further asset-price bubbles. Last week, the Fed launched QE3 and the previous week, the European Central Bank launched its bond-buying programme. Equity markets in China could also surge by 10-20 […]
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 […]
Failure Of Central Bankers
Source of graph: Reuters By John Richardson THE Federal Reserve has got it badly wrong, and could compound its mistake by launching a third round of quantitative easing (QE3), warns Ruchir Sharma, head of emerging markets and global macro at Morgan Stanley. “The first two rounds of quantitative easing fuelled a commodity bubble, increased […]
China Investment Lowest Since 2002
By John Richardson THE chart above indicates the extent to which polyethylene (PE) price rises over the last few weeks have failed to adequately compensate for higher feedstock costs. Last week saw prices edge up by a further $10-40/tonne, according to ICIS pricing. “The majority of buyers have accepted higher September offers, but we know […]
As Oil Rises Demand Weakens
By John Richardson A barrel of Brent crude oil cost $88.49 a barrel in June. Yesterday, it was trading at $116.55 a barrel. In the intervening period the global economy has substantially weakened, most notably in the case of China, as the problems that have been identifiable since late last year have become widely recognised. […]
Yuan Devaluation Needs To Be Considered
By John Richardson The “beggar my neighbour” trade wars that many economists feared would erupt after the global financial crisis were delayed thanks to fiscal stimulus. But now politicians will be under increasing pressure to erect trade barriers. “We are seeing a rise in antidumping cases involving chemicals,” a trade lawyer who specialises in the […]
September Will Be A Cruel Month
By John Richardson SEPTEMBER is going to be a cruel month when the West returns from the summer holiday period and the extent of damage to chemicals and polymer demand becomes more apparent. In Asia, temporary supply constraints in polyolefins, paraxylene (PX) and styrene monomer (SM) have disguised the damage. These constraints will at some point ease, leading […]
China And Bouncing Dead Cats
By John Richardson Fifty per cent of the blog (John Richardson) is on leave for the next two weeks. Next week Paul Hodges will be posting on Asian Chemical Connections. Paul runs the ICIS Chemicals & Economy blog.Then from the week starting 22 August my fellow ACC blogger, Malini Hariharan, returns from her leave and […]
Clinging On To Vain Hopes
By John Richardson ANYONE clinging on to the hope that the weakness in the global polyolefin market is merely down to China going through a prolonged period of destocking could face a rude awakening. China’s polyethylene (PE) demand was down 4% in January-May this year, at 7.1m tonnes, compared with the same period in 2010. […]
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