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Asian Chemical Connections

China Credit Crunch: Petchem Impact

  By John Richardson CHINA’S decision to make more funds available to lenders in order to ease the credit crunch does not represent a long-term change in policy direction, we think. “The worst is over. The People’s Bank of China (PBOC) is likely to serve as a [lender of] last resort and intervene to calm […]

China Stimulus Confusion

By John Richardson THERE was much talk last week about $158bn worth of new infrastructure projects in China that have received fast-track approval from the central government. But is this just a lot of noise to boost financial and commodity markets? Can anybody be 100 per cent certain that these projects are genuinely new, and that […]

Asian LDPE Margins Reach New Low

                                 LDPE margins in 2012      By John Richardson NORTHEAST Asian integrated low-density polyethylene (LDPE) margins keep plunging new depths. The margins were at their most negative since ICIS records began in 2000, according to the ICIS Asian PE Margin Report for the week ending 10 August. And the report for the week ending 17 August said that they had fallen even […]

Asian Operating Cuts Not Enough

By John Richardson ASIAN naphtha cracker operators have cut production in response to the exceptionally weak China market, according to ICIS. Yeochun Naphtha Cracker Centre (YNCC) has, for instance, lowered operating rates to 90 percent from 100 percent at its three crackers in Yeosu. South Korea, from the end of May. The total capacity of its […]

Stimulus Nonsense Raises Hopes

By John Richardson EARNINGS estimates for South Korean petrochemical companies will have to be cut by 50 percent for the full year 2012, said an industry observer. “It is quite clear that the first quarter was dreadful for the South Koreans and the second quarter will probably be even worse,” he added. There was a […]

Chem Q3 Results Show Flat Growth

By John Richardson CHEMICAL company third quarter financial results point to what has been apparent at ground level for some time now – a struggle to achieve volume growth over 2010. My colleague Nigel Davis, who edits in the Insight section of ICIS news, wrote in this article last week: “In the fourth quarter of 2011, […]

Back to the Serious Stuff: Fitch issues China warning

As I’ve been warning on this blog for some time, the explosion of credit in China has created a great deal of paper-bottomed optimism over the recovery. Fitch, the ratings agency, has just raised its macro-prudential risk indicator ffor China from category 1 (safe) to category 3 (Iceland et al) because of the lending surge […]

China borrowing from the future?

It’s easy to get caught up in the excitement over the rebound in the Chinese economy and miss underlying weaknesses which point to some major problems ahead. To some extent, in a desperate effort to compensate for collapsing export trade, China might have borrowed from the future in order to achieve a swift recovery. “The […]

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