BLOG: Don’t hide beneath the bed sheets when you see today’s first slide

SINGAPORE (ICIS)–Click here to see the latest blog post on Asian Chemical Connections by John Richardson.

Please don’t hide you your head beneath the sheets and hope that the scary slide, the first in today’s blog post, will somehow magically go away.

It is what it is. Don’t waste anymore time in thinking that China’s economy is going to rebound sufficiently to absorb these vast surpluses in 2025.

Then, as I discuss in today’s post and you can see from slides and two three this is what polymers producers need to do get through this crisis:

• Get more accurate capacity and production information ahead of your competitors in order to reduce losses by taking full advantage of short-term shifts in markets.
• Be ahead for your competitors on predicting new antidumping measures, safeguard duties and standard import duty changes.
• More closely monitor bilateral and multilateral trade negotiations.
• What are your government contacts like? You may need to engage more vigorously in lobbying for trade protection.
• Trump’s trade policy on China is unpredictable—from a potential trade war to improved relations. Build scenarios that reflect this wide range of potential outcomes.
• Track currency movements more closely. Build scenarios on the dollar as the Trump presidency doesn’t inevitability mean a stronger greenback.

But the end of the 1992-2021 Chemicals Supercycle isn’t just about China:

• In a much more uncertain geopolitical environment, expect continued disruption of supply chains – for example, the Houthis and the Red Sea access to the Suez Canal. This isn’t necessarily going to go away because of the Israel-Gaza ceasefire.
• The climate change crisis is the “here and now”, affecting seasonal demand and pricing patterns – for example the impact on India of more intense and unpredictable monsoons.
• Recent droughts have significantly affected shipments through the Panama Canal, reducing water levels in Gatún Lake and forcing authorities to impose restrictions on vessel size and transit capacity.

We are lucky in that the greatly increased complexity has occurred as a technology develops which will enable to model this complexity while saving a great of time and so costs. This is of course artificial intelligence which is as important a breakthrough as the inventions of steam power, electricity and the internet.

But as an FT video highlights (see a link in the blog), two-thirds of desk-bound workers are not using AI at all. CEOs have bought the equivalent of Ferraris (state-of-the-art AI) without giving their employees driving lessons.

Watch this space as I experiment with AI (I am giving myself driving lessons). Let’s discuss how AI can transform your chemicals business.

Editor’s note: This blog post is an opinion piece. The views expressed are those of the author, and do not necessarily represent those of ICIS.