By John Richardson PAUL Satchell, the UK-based chemicals analyst with glob investment bank Cannacord Genuity wrote in his December Volume Proxy* report, which was released earlier this month: “It has long been our opinion that real demand fundamentals in commodity chemicals have been so poor since mid-2010 that inventory cycles have become the prime determinant of […]
Asian Chemical Connections
China’s Sandwich Generation Revisited
By John Richardson THE sandwich generation in China, those too rich to qualify for social housing but also too poor to pay for ridiculously-overpriced private accommodation in the first-tier cities, is becoming increasingly disillusioned. “We are really tired of claims that inflation is under control, when, in fact, the real inflation numbers are much higher […]
China Faces Poor Peak Manufacturing Season
By John Richardson DEMAND for chemicals and plastics in Asia should be seasonally robust at this stage of the year, when Chinese companies typically prepare for the peak manufacturing season, but this isn’t happening in 2013, warned Paul Satchell, chemicals analyst with Cannacord Genuity. “Goods are manufactured during August and September [the peak season], for […]
Morgan Stanley Turns Bearish
By John Richardson AN interesting new report from Morgan Stanley underlines what we have been hearing about Chinese chemicals demand. The investment bank writes: “We returned to China and offer a revised message versus our trip last year. Instead of a ‘pause” in growth’, we now see a structural slowdown. China is in the midst […]
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. […]
PE Middle East Offers Keep Falling
By John Richardson POLYOLEFIN markets are not going to bottom out until August-September at the earliest, according to several producers and traders who the blog spoke to yesterday. And even if prices do eventually stop declining, confidence has all but disappeared that there will be any substantial recovery in either pricing or demand for the […]
APIC: A Sense Of Shock
By John Richardson ANOTHER theme that emerged from last week’s Asia Petrochemical Industry Conference (APIC) in Kuala Lumpur, Malaysia, was the shock at the extent of the price declines in the key China market. In polyolefins, the slump in pricing has been the most pronounced during a period when the consensus opinion was that […]
Polyolefins And China Real Estate
By John Richardson SOME polyolefin companies continue to present an optimistic picture of markets to investors. They point to positive factors such as renewed economic stimulus in China and a recovery in auto production in Thailand following last year’s floods. But, as we said yesterday, those involved in the day-to-day grind of trying to […]
MEG Continues To Struggle
By John Richardson THE above chart is a further illustration of what we believe is the wrong consensus view over China. Q1 2012 mono-ethylene glycol (MEG) imports surged by 30% compared with the same period last year, as traders bet on a sharp rebound in China’s economy. They believed all the talk of more local […]
Depressed China Demand Continues
By John Richardson ANOTHER week and sadly a repeat of the same old story: Depressed polyolefins demand in China. Pricing did, however, increase – by $10-50/tonne in the case of polyethylene (PE) and $10-40/tonne for polypropylene (PP), according to assessments by ICIS pricing for the week ending 16 March. But our colleagues at ICIS […]
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