Polyethylene markets (PE) are moving into a crisis, with margins in NE Asia already negative, as I have been forecasting. Scenario planning is now a matter of potential life or death for companies likely to be impacted over the next 12-18 months. The collapse in margins is already quite dramatic as the chart based on […]
Chemicals and the Economy
Day of reckoning approaches for US polyethylene expansions, and the European industry
Planning for future demand in petrochemicals and polymers used to be relatively easy during the BabyBoomer SuperCycle. The team would consult the latest IMF forecast for global and regional growth, and then debate the right ratio to use to calculate product demand. For polyethylene (PE), the ratio was generally just above GDP at around 1.1x, […]
Stormy weather ahead for chemicals
Four serious challenges are on the horizon for the global petrochemical industry as I describe in my latest analysis for ICIS Chemical Business and in a podcast interview with Will Beacham of ICIS. The first is the growing risk of recession, with key markets such as autos, electronics and housing all showing signs of major […]
Ethane price hikes, China tariffs, hit US PE producers as global market weakens
Sadly, my July forecast that US-China tariffs could lead to a global polyethylene price war seems to be coming true. As I have argued since March 2014 (US boom is a dangerous game), it was always going to be difficult for US producers to sell their vastly increased output. The expansions were of course delayed […]
US ethylene prices near all-time lows as over-capacity arrives
US ethylene spot prices are tumbling as the major new shale gas expansions come on line, as the chart based on ICIS pricing data confirms: They began the year at $617/t, but have since more than halved to $270/t on Friday They are only around 10% higher than their all-time low of $240/t in September […]
World Aromatics Conference focuses on key industry challenges
Our 16th World Aromatics and Derivatives conference takes place on Wednesday/Thursday in Amsterdam. Co-organised with ICIS, it provides an excellent opportunity for delegates to meet and exchange views in the critical end-of-year period. It features the usual strong line-up of speakers: Ronald Doesburg, GM for Shell’s Base Chemicals business, will describe how innovation is driving new […]
Hurricane Harvey will turbocharge move to the circular economy
300,000 homes and half a million cars have been destroyed by Hurricane Harvey. And in terms of business, it is often forgotten that Houston is home to more Fortune 500 companies than any other metro area than New York. The damage will take years to repair, as families have to regroup and re-establish their lives […]
Plastics demand is peaking as circular economy arrives
The Stone Age didn’t end because we ran out of stones. Similarly, coal is being left in the ground because we no longer need it any more. And the same is happening to oil, as Saudi Arabia recognised last year in its Vision 2030: “Within 20 years, we will be an economy that doesn’t depend mainly […]
Sinopec’s results confirm China’s focus on employment and self-sufficiency, not profit
China’s strategies for oil, refining and petrochemical production are very different from those in the West, as analysis of Sinopec’s Annual and 20-F Reports confirms. As the above chart shows, it doesn’t aim to maximise profit: □ Since 1998, it has spent $45bn on capex in the refining sector, and $38bn in the chemicals sector □ […]
China’s increase in chemicals self-sufficiency will hit US shale gas expansions
Some years ago, when China was well on the way to becoming the world’s largest importer of chemicals, a reporter asked the chairman of Sinochem, China’s largest chemical company if China intended to keep increasing its imports? “Not at all” was Su Shulin’s reply, “This is temporary. It is not our strategy. We will become […]
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