Here is a first of a series of outlook articles for 2020 where I focus on the risks ahead for the global polyethylene business By John Richardson CHINA’S polyethylene (PE) market will start 2020 with a whimper because of exceptionally high levels of overstocking, which is a reflection of growing global oversupply. In the […]
Asian Chemical Connections
Long term downcycle will transform global petrochemicals, creating new Winners and Losers
By John Richardson THIS IS not a normal downcycle. Please get over that idea however many people, both inside and outside your company, tell you this. It is very tempting to believe that this is a normal bit of bloodletting that comes along ever so often. The temptation comes from the fact that it is […]
Asian PE and PP margins at lowest levels in at least five years and will go lower……
By John Richardson NOT since at least the beginning of 2014 have Northeast and Southeast Asian polyethylene (PE) and polypropylene (PP) margins been as low as they were for the week ending 29 November. We only began our margin assessments in 2014 and so last week’s margins may be lowest for an even longer period. […]
Asian polypropylene market heads for major 2020 downturn
By John Richardson THE ASIAN polypropylene (PP) market hasn’t been as bad as the region’s polyethylene (PE) market in 2019 because of much more limited increases in supply. Whereas the PE market has been flooded with new US production, especially in linear-low density PE (LLDPE), increases in PP output have been much lower. Not for […]
Asian copolymer polyproplyene used as a sink for growing oversupply of ethylene
By John Richardson A SURE sign that the Asian ethylene-to-polyethylene (PE) markets are distressed comes from the above chart on the left which shows declines in block copolymer polypropylene (PP) premiums over homo-polymer raffia-grade PP since June of this year. In October in Southeast Asia (SEA), the price for the normally higher value block copolymer […]
Asian polyethylene shutdowns? Once again, good luck with that idea
By John Richardson I was new to the game as I had only been analysing the petrochemicals business for 12 months. Hence, when a US industry executive told me that South Korean cracker-to-polyethylene (PE) plants would shut down, during the Asian Financial Crisis, I almost believed him. This was until I made my first visit […]
Environmental taxes on US polyethylene shipments to the EU seem inevitable
By John Richardson IT ALL seemed to make perfect sense at the time. Feedstock and financing were incredibly cheap and trade barriers kept falling. Although there were some faint and distant public rumblings about plastic rubbish, most of the public and the majority of legislators were not bothered about the issue. The global economy was […]
The global polyethylene paradigm shift of permanently weaker demand
By John Richardson MALCOLM GLADWELL, in his very thought provoking book The Outliers, writes about what we think is gut instinct, but is instead the result of a minimum of 10,000 hours of doing something: Sub-conscious expertise that tells us how to think and react in most situations because we’ve been here before. So, when […]
Shift in supply chains away from China adds costs, complexities and risks for petrochemicals
By John Richardson AS PETROCHEMICALS and other manufacturers scramble to relocate their businesses away from China in order to compensate for the trade war, they are discovering that there can be no replacement for China. China has been building up its global manufacturing dominance since as early as the 1980s. In the process it has […]
IMF confirms global economy all about China as US threat to growth persists
By John Richardson DON’T SAY I didn’t tell you. An important new IMF study confirms what I’ve been arguing for a long time: China has overtaken the US to become the biggest locomotive of global economic growth. In the five years between 2013 and 2028, China accounted for 28% of all global growth, behind the […]