Home Blogs Chemicals and the Economy China’s economic “bubble” continues to deflate

China’s economic “bubble” continues to deflate

Chemical companies, Consumer demand, Economic growth, Financial Events
By Paul Hodges on 03-Nov-2009

Dalian Nov09.jpgThis year’s speculative boom in China’s economy, created by major government lending and stimulus programmes, now seems to be ending.

The evidence for this is in the above chart, showing LLDPE futures trading on the Dalian exchange. This hit 80 million tonnes (MT) in April, versus total global output for this type of polyethylene of only 2MT a year.

But volume has since been falling steadily. Last month, it was back at 13MT. And prices failed to make new highs, even though crude oil prices hit a new 2009 peak at over $80/bbl.