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Chemicals and the Economy

BASF warn on over-expansion and China

The blog was very interested to see a recent ICIS interview with Torsten Penkuhn, BASF’s petchem head in Asia, by Will Beacham. Penkuhn noted: “We are more and more concerned at BASF about an increasing risk of overbuilding once again. We currently see a risk that people are becoming too ambitious, enthusiastic and optimistic. And […]

INEOS plans refining/technology JVs with PetroChina

The Falkirk Herald, INEOS’s local newspaper in Scotland, has had to wait a long time for its ‘scoop’ of June 2009 to be confirmed. It had reported then that INEOS was in talks with PetroChina about the future of the Grangemouth refinery. As PetroChina noted at the time, “downstream business has a poor margin nowadays […]

August highlights

Many readers have been taking a well-deserved break over the past few weeks. As usual, therefore, the blog is highlighting key posts during August, to help you catch up as you return to the office. August has been surprisingly busy: Force Majeure reports show worrying increase highlighted the worrying rise in force majeures, which may […]

White Paper downloads reach 7000

The blog is delighted by the interest being shown in its White Paper ‘Budgeting for a New Normal’ and the recent Mid-Year Update. Almost 7000 copies have now been downloaded. Discussions are also underway with ICIS about producing a new White Paper in Q4, to accompany the blog’s annual Budget Outlook post in October. If […]

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 […]

Petchem supply/demand enters the New Normal

The blog’s major series this week has focused on the changes that seem to be taking place in markets for the petchem ‘building block’ products, particularly ethylene, propylene, benzene and paraxylene. These changes in relative price and availability are of vital importance to a wide range of downstream chemical products. They may well prove to […]

Global chemical recovery starts to slow

At the mid-year point, its interesting to look at the performance of the total chemical industry, including pharmaceuticals. The chart, from the American Chemistry Council, shows global demand has now recovered to 2008 levels. Pharma is more recession-proof than other parts of the industry, as people still become ill and need treatment. In terms of […]

China’s petchem volume surge will hit imports, as electricity consumption/bank lending data shows economy’s growth starting to slow

The above chart is the blog’s best effort to correlate the change in China’s bank lending with the real economy. It shows electricity consumption (blue line) and lending (red column) since July 2008. Electricity consumption is an excellent proxy for the real economy, and probably more reliable than GDP figures, which are widely believed to […]

Strategies for success in the US petchem industry

Major changes are underway in the US petchem and polymer market: • Middle East/Asian production will likely eliminate the US Gulf’s historical position as ‘exporter to the world’ • The arrival of cheaper gas, and the impact of shale gas, is changing cracker feedstock slates quite dramatically • The continuing decline in domestic gasoline demand […]

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