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Chemicals and the Economy

BASF worries about China, India

BASF opened its first China plant 20 years ago. Its Asian strategy focuses on China, Japan, S Korea and India. Thus yesterday’s comments by vice chairman Martin Brudermüller deserve careful study by any company or investor who is interested in the outlook for the region. The background was an unexpected 5% fall in BASF’s regional […]

US PE exporters face more competition in Brazil

As promised, the blog looks today at the performance of US polyethylene (PE) exporters in Brazil. It was the fastest-growing of the major markets in 2011, as the wider economy benefitted from China’s demand. Since 2008, Brazil’s PE net imports have grown 78%, from 445KT to 793KT in 2011. But as the chart shows (based […]

US exports to China fall, as cost advantage grows

US petchem producers are planning a major boost to ethylene capacity. They now have the 2nd cheapest feedstock in the world, due to ethane from shale gas. The only question is, where will they sell their product? Ethylene, of course, is very expensive to export. So derivatives such as polyethylene (PE) are the main way […]

China’s PE market down 2.5% in H1

China’s surging demand led the chemical world out of recession and into boom territory. Its 53% increase in polyethylene (PE) demand between 2008 – 2010 (up 6.2 MT), was typical of the support it provided. But H1 2011 has not maintained this momentum, as the chart shows. Its PE demand was actually down 2.5% versus […]

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 […]

Honam’s Malaysia buy opens SEA market share battle

Over-capacity is going to be a major issue for the petchem industry over the next few years. Asian producers, in particular, are likely to be worst impacted. The reason is that they have relied on exports to China taking up to 50% of their production. But now China’s own production is ramping up, reducing the […]

Japan’s exports fall record 49%, China builds inventory

Japan’s auto exports tumbled 71% in February, and its US exports fell 58%, causing total exports to decline 49%. Imports also fell 43%. Exports to China, however, were ‘only’ down 40%. And other NEA exporters, more dependent on Chinese markets, showed an improving position. S Korea’s exports were only down 17%, versus -34% in January. […]

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