By John Richardson GILLIAN Tett, the outstanding financial journalist, talked about “silo thinking” in her book – Fool’s Gold – that detailed the root causes of the Global Financial Crisis. By this she meant how too many people only had deep knowledge of one particular aspect of how financial markets were supposed to work – […]
Asian Chemical Connections
GDP Turns Negative In 11 Of China’s 31 Provinces
By John Richardson CHINA has always been a complex and challenging place to do business, but at least during the Supercycle, you were guaranteed of this one thing: Strong economic growth across just about the whole of this vast country. No longer. First of all, let’s look at one of China’s continuing success stories – […]
China And The Lewis Turning Point: It Is Here
By John Richardson FOR the last four years, my fellow blogger Paul Hodges and I have been consistently arguing that China was about to hit the Lewis Turning Point. This is the point at which any country runs out of surplus migrant labour, after enjoying a manufacturing-led boom resulting from the movement of lots of […]
Oil Price Rally Built On Very Fragile Ground
By John Richardson OIL prices rallied yesterday on an unexpected fall in inventories at Cushing in the US to 61.7 million barrels for the week ending 24 April (see the above chart). This was a decline of 514,000 barrels over the previous week, which compared with forecasts of an increase of 400,000 barrels. So does […]
China Jan-Feb Polyolefins Production Underlines New Direction
By John Richardson Here is another chart to consider as you, hopefully, dismantle and completely rebuild your strategy for China: It shows that in in January-February of this year compared with the same period in 2014, China’s polyethylene (PE) production was 15% higher at 2.3m tonnes. Its polypropylene (PP) production was 21% higher at 2.5m […]
China Jan-Feb Deflation Deepens, Growth Collapses
By John Richardson CHINA’S economy is now showing signs of extreme weakness, according official year-on-year data for January-February: Fixed asset investment, the biggest driver of growth in China’s economy, rose by 13.9% – the weakest rate of expansion since 2001. The 6.8% year-over-year growth in industrial production was “the weakest year-over-year reading ever outside the global […]
China: Affordability, Affordability And Affordability
By John Richardson THE charts below, provided by fellow blogger Paul Hodges, are of great value for any chemicals company looking beyond the current cycle of deflation and debt in China. If you want to be a winner in the world’s most-important market once this cycle is over, the charts are a key starting point. […]
Recent History Of Oil Suggests Production Will Stay High
By John Richardson THERE is a much-broader acceptance today of the recent history of oil markets, which in summary was as follows: Oil and other commodities became a great way to make money for speculators at the height of the Fed’s quantitative easing (QE) programme. This was made easy because the financial system was awash […]
The Long Term Average Price Of Oil Is $30 A Barrel
By John Richardson OIL and petrochemicals markets have behaved from mid-February until today as if the world is about to return to the way it was in the first half of last year. Here is the thinking behind this behaviour: What happened from around September 2014 onwards in crude market until mid-February of this year […]
China’s Real Estate Crisis Was Entirely Predictable
By John Richardson AN investment bubble can only remain stable if you pump ever-more air into the bubble. If you don’t continue to do this, then the bubble is in severe danger of bursting. The warning signs started flashing red for China after the crucial November 2013 Third Plenum meeting. At that point, it had […]
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