The two big gaps in the US major’s Asian presence (and gaping gaps they indeed are) are cracker complexes in India and China. China could be fixed through the alliance with PIC – meaning, Dow has leverage to get a license to build a naphtha cracker complex by offering crude supply through its new jv. […]
Asian Chemical Connections
How dependent is Chinese growth on the US?
According to this article from The Economist, total China exports account for less than 10% of China’s GDP when “value add” is stripped out – much less than the headline 40% figure for 2007, which includes imported and domestic inputs. Good news as we enter the New Year, given that a US recession now appears […]
Can India compete with China?
India is already being held back in mass manufacturing by restrictive labour practices and poor infrastructure – meaning the answer to the above question is already a resounding no in some sectors. The rise of the rupee is also a concern, as this article from The Economist highlights . The problem for India is because […]
Where does Dow/PIC go from here in Asia?
What Andrew Liveris didn’t address when interviewed over the Dow/PIC deal is what the $19bn olefins and polymers deal could mean for Asia, the Middle East and commodities. All the talk was of specialities with speculation sure to be rife over the next few months over how the US major will use its now substantial […]
More talk of credit tightening in China
Call me a bitter old cynic, but some of the talk in this ICIS news article about a government lending crackdown might be from a few traders taking positions. But still, it does seem as if the government is taking some measures to restrict loan growth. Earlier, it appeared unclear as to whether the restrictions […]
China inflation to threaten growth?
Yes, if it persists despite the best efforts of the government to cool down the economy. The point is that this is not just crude oil and food prices, but the pace of underlying inflation is picking. As the Financial Times reports, inflation is now at an 11-year-high
More Indonesian consolidation on the way?
There are strong rumours circulating that the hopelessly fragmented Indonesian petrochemical industry might undergo some more restructuring. This would follow Titan Petrochemical’s purchase of troubled polyethylene producer PT Peni, now renamed PT Titan, for a bargain price. Common ownership between sole cracker operator Chandra Asri and its numerous downstream companies would go a long way […]
The Grim Reaper readies himself
See below for an extended analysis of why everything is about to go wrong. Looking forward to picking up some bargain chemical shares over the next two years and some cheap US and UK property! As the Asian head of M&A and acqusitions for a major bank told me this morning: “Wnen everyone tells me […]
China lending restrictions to hit petchems?
China annnounced on Wednesday that it had shifted its monetary policy stance to “tight” from “prudent” in response to food-price driven inflation, soaring real-estate prices, the surge in local stock markets and continued strong growth in industrial investment. How this policy shift will be implemented remains unclear, but media reports suggest that total bank-lending growth […]
Could China be the new Japan?
Quite possibly not, according to a Deutsche Bank report. However, as the report makes the clear, the same types of imbalances are building in the Chinese economy which led to Japan’s “Lost Decade” of the 1990s. Time to take stock and have a contingency plan?
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