IT ALL CHAOS AND MUDDLE out there: China’s ethylene glycols demand could either grow by 10% in 2023 or contract by 5%.
Asian Chemical Connections
China petrochemicals rebound provides major global demand boost
By John Richardson WOW yet again. China’s export-led economic recovery continues to support global petrochemicals demand growth. Our business looks set to enjoy a much better year in 2020 than nearly all us had imagined was possible back in Q1. Here I only look at mono-ethylene glycol (MEG) and paraxylene (PX). But watch this blog […]
Ah, I see: China’s booming demand mystery a little closer to being solved
Note that all the data comparisons below are on a year-on-year basis By John Richardson THE PROVERBIAL light bulb came on early last month, thanks to this article from Trade Data Monitor (TDM) which analysed China’s strong July exports and made the point that they were driven by a big change in lifestyles. Many […]
Vietnam PE demand booms on trade war, but for how much longer?
By John Richardson GLOBAL manufacturing supply chains are adjusting to the US tariffs against China, accelerating a process that began a decade or so ago because of China’s ageing population versus more youthful populations elsewhere. Let’s use Vietnam as an example to first of all examine the longer term drift away from China. Since 2010, […]
China MEG spreads turn negative on 171% rise in US retail prices for Chinese clothing
By John Richardson THERE are a lot of theories out there about why the spreads between Chinese mono-ethylene glycols (MEG) prices and naphtha feedstock costs have fallen in April and May of this year (see the above chart). But as I shall explain in detail later on, the only explanations that entirely stand up are […]
Negative Asian polyolefins margins show need for recession planning
ASIAN PE and PP spreads turned negative in October this year for the first time since the same month five years earlier. As spreads turned negative it seems certain that margins would have been in deeper negative territory as spreads don’t account for the full costs of production. Back in October 2014 the sharp fall […]
US ethylene glycols: The Cost Of Exclusion From China
By John Richardson IF THE US were unable to export ethylene glycols (EG) to China the economic logic of US capacity expansions would face major challenges. Between 2018 and 2025, China will account for no less than 84% of global net imports (imports minus exports) amongst the major importing regions and countries. (For those who […]
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 […]
China’s March Inflation
By John Richardson THE importance of reliable market intelligence on China was further emphasised on Monday with the release of the March inflation data. Last week a sales and marketing executive with a polyolefins producer told us: “”Although the overall inflation rate has fallen to 3.2 percent (the February number), this is very misleading as it […]
MEG’s Fading Star
By John Richardson CHINA’S mono-ethylene (MEG) market was supposed to be very strong this year. But instead, to date we have seen persistently weak market conditions that few people, least of all the traders, seem to have anticipated. The traders appear to have been taken in by the hype and booked cargoes for delivery […]