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Asian Chemical Connections

China Politics

In the last of our series of blog posts on some of the major challenges facing China’s economy over the next 12-18 months, we look at politics.     By John Richardson THE outcome of the battle over China’s economic direction is, of course, of crucial importance to the world economy. It would be comforting […]

China Bad Debts

In the first of a series of blog posts on the major challenges facing China’s economy over the next 12-18 months, we look at bad debts.   High stakes in Hangzhou. Source of picture: Wikimedia     By John Richardson A fascinating blog post by Patrick Chovanec makes this very worrying observation about China’s bad debt […]

China’s VUCA Moment

  Ben Bernanke. Source of picture: Wikipedia   By John Richardson OUR next three blog posts will examine some of the threats to a recovery in China’s chemicals and polymer demand growth over the next 12-18 months. We will look at: *Debt. Is China already confronting a Ben Bernanke moment? (In November 2007, the Fed […]

KPMG Warns Of US Overcapacity

  By John Richardson A management consultancy has gone on the record to warn about what the blog has been warning about for months: That the US petrochemicals industry is in danger of pushing itself into oversupply. KPMG, in a report released late last month, said that the success of planned US expansions, including as […]

China’s Luxury Goods Risk

  By John Richardson THE “luxury end” of China’s polyethylene (PE) market is being heavily targeted by overseas producers and the results so far have been pretty spectacular, according to one of the producers. “The annual growth in demand for higher value grades has been tremendous – two times GDP,” said a senior executive with […]

Managing China’s Political Challenge

By John Richardson Getting on with politicians is always pretty useful for doing business anywhere. And in China right now, it is a case of working key relationships with the right set of senior politicians who are set to take control of the Politburo later this year, after the once-in-a-decade leadership transition has taken place. […]

China’s Labour Complications

Source: Wang Feng, director of the Brookings-Tsinghua Center for Public Policy in Beijing, from an article published in the China Economic Quarterly.   By John Richardson ONE of the explanations for China’s disappointing petrochemicals demand growth during 2012 is that even where export-focused factories in southern and eastern China can find sufficient orders to run […]

Chemicals In A Vicious Cycle

    By John Richardson OIL prices could fall to as low as $35-40 a barrel or might slip no further than $60-70 a barrel, depending on which analyst you belief. And we know of one global polyolefins company that is working on the assumption that crude, both West Texas Intermediate and Brent, will trade […]

China Still Destocking

  By John Richardson A NEW report from HSBC supports our argument that China’s synthetic resin market has yet to bottom out. Big structural changes in China’s economy are an additional factor, in our view, to the slowdown in China not covered in the comments below. The bank highlights, of course, the weak business environment […]

Cotton In Uncharted Territory

    By John Richardson POLYESTER producers, and their raw-material suppliers, enjoyed a huge boost to their profitability between October 2008 and March 2011 when cotton prices increased by 468 percent from 40 cents/lb to $2.27/lb. This led to polyester being substituted for cotton, and helped inspire a big capacity build in purified terepthalic acid […]

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