By John Richardson WE all should know that China’s published GDP figures are meaningless as, of course, China’s premier Li Keqiang has told us so. But the trouble is that so many analysts continue to talk about another burst of stimulus being just around the corner, which will help China achieve its 2014 GDP growth […]
Asian Chemical Connections
China Transformation Webinar Tomorrow
By John Richardson EVERYWHERE you look is the same, according to the Asia ICIS pricing reports for the week ending 5 September. For example: Purified terephthalic acid operating rates were just 52-53% at the end of last week, down from around 60% in June. Asian benzene prices had fallen to a 24-week low on sluggish […]
Asia Chemicals Will Need To Cut Operating Rates
By John Richardson THE above chart, from Paul Satchell’s latest Volume Proxy*, indicates that the downturn in Asian chemicals markets has become more entrenched. “The continued decline in the Asia line lends further support to our earlier assertion that the peak manufacturing season in China is likely to disappoint,” writes Satchell, a UK-based chemicals analyst […]
Shanghai And The Real Pessimists
By John Richardson THE blog is used to being told “you are too pessimistic on China”, and is used to ignoring such comments, because they miss the point about what we have long being trying to convey. We challenge anybody to read yesterday’s post and reach the conclusion that we are pessimistic. What is remarkable […]
China Deals With Demographics In The Right Way
CHINA’S approach to its challenging demographics are in complete contrast to the Russian approach, which we outlined yesterday. In the case of China, its strategy involves: Providing manufacturers with strong incentives to relocate from high labour cost coastal provinces to low labour cost inland provinces. These incentives include discounted land and paying all of a company’s […]
Russian Sanctions Too Little, Too Late
By John Richardson “A common orthodoxy in Western thought – the notion of a globalising world in which greater prosperity was ultimately analogous to stability – has been again thrown into contention,” wrote the Financial Times, in an article worth very close reading, headlined Russia’s New Art of War. The problem with this common orthodoxy […]
China Will Not Shut Down. It Will Instead Run Harder.
By John Richardson EVERY $10 decline in the iron ore price knocks more than $2bn off the annual revenues of Vale, Rio Tinto and BHP Billion and around $250m from those of Anglo American. We can see a similar dynamic playing out in chemicals and polymers markets, but on a scale that has yet to […]
China’s Polyester Crisis: The Global Implications
By John Richardson EVERYWHERE you turn it looks bad in China, especially in the polyester value chain. “So has it always been in polyester. Because of its ownership structure, capacities up and down the chain are often out of sync,” said an industry observer. “Hence, the current big overhang in purified terephthalic acid (PTA) capacity […]
China Exceeds US 20th Century Cement Output In Just Two Years
By John Richardson CHINA produced more cement in 2011 and 2012 than the US produced in the whole of the 20th century. Yes, that’s right, China produced more cement in just two years than the States produced in 100 years. Statistics such as this leave the blog scratching its head as to how anybody could […]
China Polyethylene: Fitting 11% Into 6%
By John Richardson ELEVEN per cent apparent demand growth in polyethylene (PE) in China will not go into estimates of real demand growth at no more than 6%. This is our concern based on the latest set of data on the market (see the above slide). As you can see: Apparent demand growth (imports minus […]
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