By John Richardson The ABOVE CHART shows that lending via China’s shadow banking system fell by no less than 70% in January-February 2018 over the same period last year. This follows the 90% year-on-year fall in January 2018. The latest data underline the key conclusion that lending via the highly speculative shadow lending system is […]
Asian Chemical Connections
Stock Markets: Real Implications For Petchems and Risks Of A “Cynical Bubble”
By John Richardson WHEN stock markets are rising, the proverbial garden can look as if it is blooming with summer flowers without a weed in sight. But the underlying data suggest wealth inequality is still a major issue in the US, with the inequality creating iconoclastic politics in the US that continue to threaten a […]
Plastic Rubbish Backlash Will Lead To New Polymer Manufacturing Processes…
….as sustainability replaces globalisation as the new industry value driver By John Richardson IT HAS always been illogical to claim that as Peak Oil Demand approaches this provides a great new opportunity for lots of cheap refinery feedstocks to meet booming polymers demand. Firstly, nobody knows what the decline in demand growth for oil will mean […]
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 […]
Asian Petchems Profits Could Test Historic Lows In 2018
By John Richardson THE ASIAN steam cracker business has struggled to pass on higher oil prices as the above chart further underlines. As you can see, high-density polyethylene (LLDPE) injection grade spreads including selected co-products have slipped over the last few months. Spreads are a rough but still useful measure of profitability, and so tell […]
Petrochemicals Destocking Phase Likely As Crude Volatility Increases
By John Richardson WE COULD now be in a destocking phase in petrochemicals markets as oil prices are falling on a surge in US production. This would obviously mean lower petrochemicals pricing, leaving companies that have overbuilt raw material inventories with substantial financial losses. I hope that most companies have been prudent. In January, the […]
House Of Cards Waiting To Fall: Oil, Equities And The Economy
By John Richardson HOW much of the rise in oil prices since June of last year has been down to the fundamentals of supply and demand versus the hedge funds taking out a record number of short positions? We are about to find out, I feel. There are early signs that the hedgies have started […]
Petchems Face Major Inventory Risk As Economic Confidence Builds
By John Richardson NOBODY knows how many tonnes of un-cracked naphtha are sitting in steam cracker storage tanks around the world compared with H1 of last year. Or how much plastic resin and rolls of plastic film are being held in storage by converters. Or how many car dashboards are in the warehouses of auto […]
In One Simple Chart: The Risk For Petchems From Crude
By John Richardson Sometimes a simple chart is worth hundreds of words. A lot less than hundreds of words today, therefore, as you consider the above chart and these two key questions: If the global economy was that strong, and/or petrochemicals industry fundamentals as sound as the consensus view holds, why has there been such […]
Asian Naphtha Cracker Spreads To Fall By 50% In 2018
By John Richardson ASIAN naphtha cracker operators will see a 50% decline in average spreads, or differentials, between their raw-material costs and finished product prices in 2018 compared with last year, according to my forecasts in the above chart. This will be the result of a further steep rise in oil prices and increased polyethylene […]
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