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Chemicals and the Economy

Consensus wisdom defies reality around the world

“Consensus wisdom” is a handy way of keeping up with events.  Nobody likes to be the person who says “I don’t know” when the boss asks a question about something important.  But unfortunately, “consensus wisdom” is often wrong, as Ipsos MORI confirm in their new ‘Perils of Perception‘ survey,  As the authors note: “It highlights how […]

China’s PVC exports confirm its move to self-sufficiency

Many commentators were shocked by China’s weak trade data on Monday – with imports falling 12.5% versus July 2015, and January – July imports down 10.5%.  But they were no surprise to anyone focused on developments in the chemical industry, which has once again confirmed its status as the most reliable leading indicator for the […]

Chemical production continues to slow across most regions

Chemical production is currently the best leading indicator for the wider economy, as financial markets have lost their power of price discovery due to the impact of central bank stimulus. The above chart, based as always on the excellent American Chemistry Council (ACC) data, continues to flash the orange warning signal first seen last month.  The key […]

US ethylene outages boost European and Asian PE producers

Polymer traders must be already counting their end-of-year bonuses, as the value of the US$ rises whilst crude oil prices weaken.  The biggest bonuses will likely go to polyethylene (PE) traders competing with US producers. The reason is that US ethylene spot prices are currently at record levels.  An astonishing 10% of US ethylene capacity has been out […]

US PVC exports tumble as demand weakens in key markets

The US PVC industry is hitting new problems, to add to the post-2006 collapse of the US housing market. Yet only 10 years ago, it was riding high.  Demand into housing (the main outlet) was at record levels thanks to subprime lending, and PVC production had just hit a record 7.3 million tonnes. Even after the financial Crisis, global […]

China’s PTA, PVC exports jump as it moves to preserve jobs

To assume, as they say is “to make an ass out of u and me”.  That was certainly the case last week, when financial markets assumed that China’s slightly better PMI index was a sign that its domestic economy was stabilising.  They had temporarily forgotten the key message of February’s Research Note, namely that the government would aim to […]

US caustic soda exports weaken on China slowdown

What a difference 2 years can make.  That’s the obvious conclusion from comparing US exports of caustic soda today, with those seen in the years to 2012.  As the chart, based on Global Trade Information Services data shows: Net US exports fell 4% in Q1 (red column) versus 2012 (blue), and were 19% below 2013 levels Detailed […]

China’s PE imports slip: Middle East gains market share

China has been the main source of chemical and polymer demand growth over the past 2 years. But newly released trade data suggests its import volume on core products such as polyethylene may now be reducing, as more domestic capacity comes online. Equally, Asian producers, and the USA, face strong competition from low-cost Middle East […]

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