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Asian Chemical Connections

China To Drive Return To Global Deflation

By John Richardson THE Wall Street Journal agrees up with my blog: Two months after I warned that a slowdown in lending growth in China was a major threat to the global economy, its 1 May front-page article echoed my warning. Meanwhile, evidence continues to build that the pace of the credit slowdown is accelerating. First […]

China: The Hammer Falls On BOPP

By John Richardson Biaxially oriented polypropylene (BOPP) films capacity in China has risen to three times the country’s annual demand,  said a source with a global polyolefins producer. Watch this space for the actual data as this is still work in progress. But suffice to say here, the initial numbers we have been given would […]

China Commodities: Fool’s Gold

By John Richardson GILLIAN Tett’s splendid book about the root causes of the global financial crisis, Fool’s Gold, talks about “silo thinking”. Regulators, politicians and supposed financial experts had deep expert knowledge in their chosen fields, but lacked the ability to stand back and connect the dots. This, of course, led them to miss all […]

China’s “Whack-A-Mole” To Accelerate

By John Richardson Mono-ethylene glycol (MEG) is the latest petrochemicals product to be caught up in real estate-linked collateral trading, an industry observer recently told the blog. “To some extent, MEG has been bought not for real demand, but instead as a financial instrument to fund property deals,” said the observer. If a product such […]

China Polyethylene Demand Up By 25%

By John Richardson WHEN something appears to be good to be true, it usually is. Back in 2009, China’s demand for polyethylene (PE) increased by more than 20% – way above the increase in GDP – because of just about the biggest injection of credit into an economy in history, as our top chart illustrates. […]

Irrationality And Staying Solvency

By John Richardson JOHN Maynard Keynes, the famous economist and speculator ,  once said “the market can stay irrational longer than you can stay solvent.” In other words, if you are a trader you can sit around for ages waiting for the fundamentals to drive any particular market, and, as a result, go bust – […]

Adjusting Inventories To Lower China Growth

By John Richardson EXCESSIVE inventory building across a range of commodities in China, including  petrochemicals, continues to worry the blog. One reason, as we discussed yesterday, might be that traders are in the midst of a liquidity squeeze as a result of the late June credit crackdown. They have therefore taken out further very-aggressive positions […]

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