The blog has come across an interesting example of the impact of China’s credit growth, courtesy of Merryn Somerset Webb in the Financial Times. She highlights a YouTube video (link above) which investigates the new city of Ordos. The old city has become known as “China’s Texas”, because of the recent wealth generated from the […]
Chemicals and the Economy
China worries about house price inflation
The Dalian polymers future market had a strong end to 2009. As the chart shows, Linear Low Density Polymer volumes (blue line) jumped to 44 million tonnes. The new PVC contract saw the same volume. But there are growing signs that this may prove a ‘last hurrah’. The government is clearly starting to worry about […]
Top 10 posts in 2009
Blog readers have a wide range of interests. That is clear from the list below of the Top 10 posts in 2009. It also confirms the complexity of the chemical industry, and its fascination. In alphabetical order, it is as follows: • Bubble, bubble, toil and trouble • Companies remain cautious on the outlook • […]
US auto sales in 2009 at 1982 level
US auto sales last year at 10.4 million were the worst since 1982. Even this figure was slightly artificial, due to the support provided by the $3bn ‘cash for clunkers’ programme in the summer. This impact can be seen in the chart, with total volumes (black line) picking up again in December under the impact […]
China’s stimulus boosts PE, PP, domestic recycling
China’s bank lending has rocketed this year, as the government attempts to maintain employment in the face of a major collapse in vital export volume. New figures show it had reached $1.35bn by the end of November. By comparison, lending in the whole of 2007 was just $0.5bn. As the Wall Street Journal notes, this […]
China’s polyethylene imports surge 63%
The above chart, courtesy of trade data experts GTIS, shows the extraordinary leap in China’s polyethylene imports this year. They have surged 63% January – October in 2009 (blue bar) to 6.7 million tonnes versus 4.2 MT in 2007 (green bar) and 2008 (orange bar). Many countries have seen massive rises. Iran exported 404kt vs […]
Devaluations risk leading to a Cycle of Deflation
In February, the blog worried that we were at the start of a cycle of deflation, as depicted in the above chart from Comstock Partners. The warning signs were that major excess capacity was developing in many industries, and some major countries were devaluing. Since then, the US and China have both undertaken competitive devaluations […]
China’s oil imports not driven by domestic demand
A key driver for the rally in crude oil markets has been the increase in China’s demand. The assumption has been that this confirms economic growth is recovering strongly. Crude oil imports have certainly been rising since Q1, and have recently averaged 500kbpd more than 2008. Refinery runs have also been higher. However, new analysis […]
Insights from LyondellBasell and BASF
Recent comments from LyondellBasell’s COO, and BASF’s CEO, seem worth highlighting as we come to the end of the results season. Ed Dineen noted that China’s polyethylene demand seems partly linked to changes in crude oil pricing, “It turned down somewhat as we saw crude retreat a little, but as crude turned back up toward […]
China exports deflation as it adds capacity
China will pump loans worth $1.3trn into its economy this year, equal to 1/3rd of GDP. Equally, by tying the yuan to the US$, China has achieved a major devaluation against major currencies such as the euro. The result has been that China’s Q3 GDP rose less in “nominal” terms than in “real” terms. Normally […]
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