By John Richardson PETROCHEMICALS are a great barometer for economic growth as they are the raw materials for so many finished goods. So, if petrochemicals producers see their profits slip, this provides an early signal that something is wrong with wider economies. It is not just petchems producers that should therefore take note of the […]
Asian Chemical Connections
Asian Polyolefins Markets Still Indicate Economic Slowdown
By John Richardson ANOTHER week has led to another fall in Asian polyethylene (PE) and polypropylene (PP) prices despite higher naphtha feedstock costs on stronger crude oil. Pricing has been weak since the Lunar New Year Holidays, (15-21 February). Market participants had expected the opposite on a recovery in demand following the holidays and tight […]
China Shadow Banking Squeeze Threatens Global Economy
By John Richardson THE trend that I identified last August is continuing. China is in the midst of a major contraction in lending via its highly unregulated, and so very risky, shadow banking system. Last year we saw a big fall in shadow lending, but now it has totally collapsed. In January, shadow lending was […]
September Will Be A Cruel Month
By John Richardson SEPTEMBER is going to be a cruel month when the West returns from the summer holiday period and the extent of damage to chemicals and polymer demand becomes more apparent. In Asia, temporary supply constraints in polyolefins, paraxylene (PX) and styrene monomer (SM) have disguised the damage. These constraints will at some point ease, leading […]
China Real Estate: When Is A Bubble A Bubble?
Source of picture: www.managingthedragon.com By John Richardson I love the phrase used by Andrew Peaple of the Wall Street Journal in this article on China’s property “bubble”: Getting a straight answer is like “nailing jelly to a wall”, in other words xxxxxx impossible. I will be in Shanghai next week on a business […]
Some Very Crude Perceptions
Source of picture: www.prisonplanet.com Misleading perceptions can be very dangerous – especially when they apply to the crude-oil futures markets. “The price has more than doubled this year partly because of the belief that the recovery in Chinese oil-import demand is all about booming local consumption” said a source on the sidelines of […]
Another great year for Asian polyolefins but……
……how long will it last is the inevitable question. Demand growth has been so strong so far this year with very little new production coming onstream that while crude oil and the price of monomers have set a floor for pricing, they no longer appear to be the main drivers behind fluctuations and increases; in […]
Will Japan’s rate rise do any good?
The Bank of Japan has decided to raise interest rates – from 0.25 to 0.5%. This could weaken the yen, thereby damaging the country’s export-led recovery. For the petrochemical players, the benefits of a 21-year low yen have been offset by the increased cost of importing naphtha. The bank is also banking on last summer’s […]
Japan is still in search of a consumer recovery
Japan’s fourth quarter GPD growth of 4.8%, which was released today, exceeded economists’ expectations. However, although consumer spending rose by 1.1% on an annualised basis, this merely compensated for the 1.1% decline in Q3. In addition, wages rose by only 0.2% last year, barely up from a decade-long decline. Companies are preferring to pay down […]
Is India set to tank?
There seems to be a conspiracy of complacency about India. Read The Economist’s dire warnings. To be fair, the naysayers have been warning of an India collapse for years, But the longer that these imbalances are allowed to build, the greater might the collapse be when it happens
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