By John Richardson THE blog has spent a great deal of time talking to lots of people, and reading everything it can get its hands on, concerning China’s leadership handover and has reached one overwhelming conclusion: Nobody has a clue. The comforting, easy analysis is that the once-in-a-decade handover will be handled smoothly – and […]
Asian Chemical Connections
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 […]
“Good News” Over China Bank Lending
By John Richardson CHINA’S new local currency lending rose to 703.9 billion Yuan ($111 billion) last month, way ahead of July’s 540.1 billion Yuan. If a you are trader in the Dalian Commodity Exchange’s futures contract in linear-low density (LLDPE) you can take this ostensibly encouraging number, and premier Wen Jiabao’s speech earlier this week about […]
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 […]
China Stimulus Confusion
By John Richardson THERE was much talk last week about $158bn worth of new infrastructure projects in China that have received fast-track approval from the central government. But is this just a lot of noise to boost financial and commodity markets? Can anybody be 100 per cent certain that these projects are genuinely new, and that […]
The Best Of All Possible Worlds
Source of graph: http://www.businessspectator.com.au/ By John Richardson “Candide, the classic novel of the great French writer Voltaire, is a satirical description of a young man who has been taught that ‘everything is for the best in the best of all possible worlds’,” wrote Paul Hodges in this blog post last week. Thus, we have […]
China Exports, Rebalancing Scenarios
Source of chart: Morgan Stanley By John Richardson CHINA might soon raise export tax rebates, as it did during the 2008-2009 global economic crisis. Some chemicals and polymers exporters to China would welcome the increase in export tax rebates (this would make re-exports of finished goods from China more competitive). But on this occasion, […]
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. […]
China Textile Exports Decline
Source: http://www.economist.com/ By John Richardson RISING China labour costs are compounding weakness in the manufacturing sector and thereby, of course, damaging chemicals and polymer markets. The country’s garment exports fell by 0.2 percent in the first seven months of this year, compared with a 24 percent increase in January-July 2011, says the Association of Chinese […]
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