By John Richardson Yesterday, President Trump threatened to impose penalties on China for alleged abuse of intellectual property right rules. Below is the context behind way claims of abuses are likely to increase in the future. This suggests that China and the US are on a collision course over trade, with major negative implications for […]
Asian Chemical Connections
US Import Tariff Decision: Impact On Polyethylene And The Global Economy
By John Richardson THE PROSPECT of a US-China trade war has edged closer as a result of President Trump’s announcement yesterday that the US will impose 25% import tariffs on steel and 10% import tariffs on aluminium. Countries hit hard by the tariffs will include China and Canada. We luckily avoided a trade war in […]
China’s Polyethylene Market: Three New Scenarios For 2018-2025
By John Richardson THE above slide underlines the growing complexity surrounding China’s economy, politics, society, environmental policies and trading relationship with the US. I’ve placed this complexity in the context of the implications for the polyethylene (PE) industry. The above slide, and the full explanation below, updates my three scenarios from last September. These new […]
US-China Trade Relations In 2018: Prepare For The Worst
By John Richardson WE GOT away with it in 2017 by luck rather than design, as there is of course very little that petrochemicals and polymers companies can do to prevent a global trade war other than lobbying politicians. Part of the reason for the lucky escape was the warmth of the Trump-Xi meeting in […]
China And Xi Jinping: The Five Big Challenges You Must Understand
By John Richardson THE above slide, from my speech at this year’s Gulf Petrochemical Association Forum, is a summary of much of the analysis on this blog over the past 12 months. This is another of my print-out-and-keep guides. Please pin to your chemicals company boardroom wall as you plan your scenarios for China. In […]
How US Could Be Squeezed Out Of Europe’s Polyethylene Market
By John Richardson EARLIER this year a commonly held view was that globalisation would slip into reverse gear with the very real prospect of a global trade war. But this view didn’t take into account China’s One Belt, One Road (OBOR) initiative, the launch of which predated the election of Donald Trump as US president […]
Benefits, Risks Of Petronas/Aramco Deals Serving As Template
By John Richardson THE PETRONAS and Saudi Aramco joint ventures in the RAPID refining-to-petrochemicals project in Malaysia may serve as a template for further “win/win deals”. Whilst these deals will substantially benefit the companies and countries involved, there are broader risks that I’ll discuss at the end of this blog post. Back in February, Aramco […]
China’s Xi: Squaring Circle Of Poverty Alleviation, Environment
By John Richardson THE ONLY China that most foreigners have visited, including myself, is the southern and eastern seaboard provinces where all the talk is about booming poylolefins and other polymers demand on the rise in middle class consumption. So strong is middle class consumption growth via mobile internet sales that the multiples of polyethylene […]
How US Polyethylene Exports To China Could Come To A Halt
By John Richardson THE US has abundant shale gas reserves that have in effect been solidified into new polyethylene (PE) capacity, which is largely for export as this is a cheap way of shipping ethane. If you subscribe to the standard view of how the world’s economy will behave over the next decade, growth will […]
Global Debt At Unsustainable Levels As We Wait For Trigger Factor
By John Richardson THE whole point about debt is that it should be sustainable. You should only lend or borrower money if you are entirely convinced that future economic conditions – i.e. future demand – justify your commitments. Nice theory, shame about the practice. If lenders and borrowers badly misjudge future real demand then we […]