By John Richardson On the surface, the above chart represents very good news for exporters of polypropylene (PP) to China. As you can see, our base case sees import volumes creeping up from around 3.9m tonnes in 2018 to 4.2m tonnes in 2025. But this chart should be merely a starting point for a much […]
Asian Chemical Connections
China Govt Policy To Shape Petchems Demand, Pricing In 2018
By John Richardson NAPHTHA feedstock costs are on the way up, which is of course the result of higher crude prices. So far this year, the naphtha cost for Asian steam cracker operators has averaged $479/tonne CFR China. But our forecast for November 2017-March 2018 is $541/tonne CFR China. This might turn out be an […]
Global Economy Is Less Able To Withstand A New Oil Price Shock
By John Richardson HISTORY has a tendency to move very slowly, inching forward incrementally, and then all of a sudden a flurry of events over an incredibly short space of time can change everything. This is where we are today. Oil prices had been creeping up long before the 4 November launch of the anti-corruption […]
China’s Accelerating War On Air Pollution: Latest Implications For Petchems
By John Richardson CHINA has steadily increased the intensity of its war against pollution over the last three years – especially the war against pollution generated by burning coal. This has major implications for the petrochemicals industry, which we will detail later on this post. Firstly, though, here is a timeline of events over the […]
Asian Polyethylene Producers: What You Must Do Now $70 Crude Is More Likely
By John Richardson THE facts on the ground in global crude markets have shifted even further in just two days. Now it seems more likely that oil prices will rise to $70 a barrel or above in Q1 of next year, possibly even earlier. What has changed are the ramifications of Saudi Arabia’s anti-corruption campaign. […]
Crude Oil Prices In 2018: Impact On Naphtha-Based Polyethylene
By John Richardson I WILL explain the full significance of the above charts for the Asian and global polyethylene (PE) industries later on this is post. In short here, though, a great deal hinges on next year’s oil prices, with the possibility that there is more momentum left in today’s rally. And of course […]
Benefits, Risks Of Petronas/Aramco Deals Serving As Template
By John Richardson THE PETRONAS and Saudi Aramco joint ventures in the RAPID refining-to-petrochemicals project in Malaysia may serve as a template for further “win/win deals”. Whilst these deals will substantially benefit the companies and countries involved, there are broader risks that I’ll discuss at the end of this blog post. Back in February, Aramco […]
China’s Xi: Squaring Circle Of Poverty Alleviation, Environment
By John Richardson THE ONLY China that most foreigners have visited, including myself, is the southern and eastern seaboard provinces where all the talk is about booming poylolefins and other polymers demand on the rise in middle class consumption. So strong is middle class consumption growth via mobile internet sales that the multiples of polyethylene […]
China Lending Bubble Adds 4.7m Tonnes To Polyethylene Consumption
By John Richardson THE IMF produced a very interesting study earlier this month, in which it estimated that if it had not been for China’s giant economic stimulus programme the country’s real GDP growth would have averaged only 5.3% per annum during the five years to 2016. Instead, however, the IMF estimates that China’s economy […]
End Of China’s Latest Credit Bubble: Implications For Chemicals Demand
By John Richardson THE effect on the global economy of China’s slowdown as it enters its next credit cycle is something I discussed on Friday. We next need to think about the implications for demand growth for all the things made from chemicals and polymers in China. To help you think through this issue – […]