By John Richardson WHEN you have spent several billion dollars building a brand new US steam cracker complex, you will of course do everything to maximise operating rates to pay back your debts, even if it means pricing off your advantaged raw-material supply. So why not new US polyethylene (PE) supply priced-off ethane, rather than […]
Asian Chemical Connections
Pointing The Finger At Wrong Incentives Won’t Help
By John Richardson PEOPLE do what they have to do to get by and so how we behave largely depends on the incentives that are set for us. To give you just one example, the route to “getting by” – or rather the way to apparently make lots and lots of money now and in […]
Why The China “Higher Base” Argument Doesn’t Stand Up
By John Richardson WHAT an amazing success story. The above chart shows that: China’s high-density polyethylene demand rose by 151% between 2000 and 2014 to end up at around 10 million tonnes. Low-density PE consumption surged by 72% to approximately 4 million tonnes. And linear-low density PE was up by 133%, ending up at 8 […]
US Petchems: Last Piece Of Expansion Logic Fades On Falling Crude
By John Richardson THE demand was simply never going to be there to support anywhere close to the number of US cracker and derivatives projects listed in the table above. There long been two reasons for this: The US is a mature market with no demand growth since 2000 in ethylene and the biggest-volume derivative […]
Burying Your Head In The Sand Is Not The Answer
By John Richardson YOU are a US polyethylene (PE) producer or any other chemicals producer in a country that remains on the wrong side of the new consensus about climate change. Sure, you can choose to bury your head in the sand and pretend that this shift in this consensus isn’t permanent. But with your head […]
US Needs A New Normal “Permanent Study Group”
By John Richardson A LOT of the discussions taking place in and around last week’s American Fuel & Petrochemical Manufacturers International Petrochemical Conference (IPC) in San Antonio, Texas, was, of course, around oil prices. Lower crude prices means less of a production cost advantage for the US petrochemicals industry, which is predominantly based on natural […]
US Petchems: Victim Of A Black Swan? What Black Swan?
By John Richardson JIM Gallogly, the former CEO of LyondellBasell, has advised US petrochemicals companies to “think very, very hard” about new investments. “Some of you simply are going to be too late. And you need to recognise where you are at,” he told delegates that this week’s 40th American Fuel & Petrochemical Manufacturers […]
2014: The Rear View Mirror
By John Richardson MOST of my forecasts for 2014, which I made in this post on 30 December last year, look good in the rear view mirror. I was right about credit availability being the single biggest issue for the polyethylene (PE) industry in China – and, of course, all other manufacturing sectors. As the […]
Global Polyethylene: A Painful Balancing Act
By John Richardson HERE are a few important facts about polyethylene (PE): China accounted for 30%, or 2.35m tonnes , of global imports of linear low-density PE (LLDPE) in 2013 (see the above chart). It accounted for 43% of high-density (HDPE) imports. This represented 4.73m tonnes of shipments to China. And in the case of […]
US Petrochemicals: The Way Forward
By John Richardson ANYBODY out there prepared to make a guess? How long are these fantastic earnings for US petrochemicals companies in the key polyolefins space going to last? Six months, 12 months, 18 months or perhaps even longer? The question then becomes how financial analysts, investors, stock markets and therefore companies will respond when […]
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