By John Richardson BACK in 2003 the Bank for International Settlements (BIS) predicted that dangerous imbalances were building up in the global financial system. The BIS, a Brussels-based international organisation for central banks, was worried that the Fed and other central banks were compromising long term stability in favour of short-term growth. Sadly, policymakers didn’t […]
Asian Chemical Connections
European Political Suicide Seems Unlikely
By John Richardson For once, we are not going to talking about demand but will instead focus only on supply. “In all scenarios, the US captures market share away from Europe,” the American Chemistry Council’s (ACC) chief economist, Kevin Swift, said in a presentation last week. As my colleague Nigel Davis, in another of excellent […]
China Adjusts To “Zero Inflation” In Textiles
By John Richardson CHINA’S polyester chain business is undergoing a painful adjustment period, as the slide above indicates, as a result of: Expectations that cotton prices will drop to a five-year low in 2014-2015. This is largely the result of China’s decision to directly support farm incomes, rather than buying-up ever more cotton stocks. Cotton […]
China: When Sentiment Tells Us Something Important
By John Richardson THE blog once asked a seasoned petrochemicals industry consultant what the price of polypropylene (PP) was. “It depends on whether the Hong Kong traders are in a good or a bad mood this morning,” was his reply. Excellent point, of course, because sentiment plays an important part in market direction – and, […]
Modi Pledges To Do More Than Just Boost The Stock Market
By John Richardson THE blog is delighted that Narendra Modi sees the bigger picture through this bold statement: “By 2022, no Indian should be without a home, without clean water, without electricity and without a toilet.” Fantastic. This is exactly what we wanted to hear rather than a load of unrealistic nonsense about India achieving […]
China’s Petchem Markets Contradict Latest PMI
By John Richardson IF you study China’s petrochemicals markets on a regular basis they tell you something very important: That despite persistent efforts to tighten-up supply across several sectors in order to entice end-users into stock building, “hand-to-mouth” purchasing remains their policy. For example, polypropylene (PP) import prices firmed on a heavy turnaround season in […]
US To Lose Out To China In Energy Race
By John Richardson ARE you either a “tree hugger” or a “climate science denier”? If you fall into one of these two categories, you will be one of the dwindling minority of people who support a multi-faceted approach to US energy policy, according to a US petrochemicals industry source. “The tree huggers are those who […]
China To Follow In America’s Oil And Gas Footsteps
By John Richardson DURING the economic Supercycle it all worked beautifully, as the above picture indicates. China sold stuff to the West and then bought lots of US Treasuries from their earnings in order to keep US interest rates low. This enabled US consumers to buy even more shirts, washing machines, refrigerators, TVs etc from […]
Help Us Answer Some Very Important Questions
Sometimes two graphs can be worth a thousand words. IF the world economy is well and truly on the right course then why is that global chemicals operating rates have yet to return to their pre-crisis levels? (see the top chart from the American Chemistry Council). This is a very long downturn by historic […]
China, Chemicals And Interest-Rate Arbitrage
By John Richardson WHACK A MOLE on the head and another one pops up somewhere else. This is tremendous fun as an arcade game but not that much fun, metaphorically speaking, for the Chinese government. “The commodity-backed loans at the centre of a probe into an alleged financial scam at a Chinese port [Qingdao] are […]
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