By John Richardson TOO many people will look at the chart on the left and think, “Crisis? What crisis?” But glance to the right for what it is like in another petrochemicals value chain. What is happening on the right could sooner than you think be happening on the left: The polyethylene (PE) value chain […]
Asian Chemical Connections
Oil Prices: Same As 200 Apples And Googles Going Bust
By John Richardson NO less than $119 trillion (or $119,000 billion) has been wiped off the value of the world’s proven oil reserves. YES, that’s right, if you look at the data on proven oil reserves in the CIA factbook, as John Mauldin did to verify calculations originally made by David Aron Levine, this is […]
This Is Not Just Another Economic Downcycle
By John Richardson ECONOMIC upcycles come and go, but in the end, the fundamentals don’t change. This is the message I have picked up from conversations with senior industry executives over the last two weeks. “All we have to do is cut costs, wait this one out, and everything will be fine in 12-18 months. […]
Oil In Free Fall: What It Means For Petchems
By John Richardson AS crude heads to perhaps as little as $10-15/bbl, you have evaluate the immediate, or first order, effects on the petrochemicals industry and then move to stage two – what it means in the longer term. Right now, you have to worry about the potential for raw material inventory losses up and […]
Global Polyethylene Priced Off US Ethane. Why Not?
By John Richardson WHEN you have spent several billion dollars building a brand new US steam cracker complex, you will of course do everything to maximise operating rates to pay back your debts, even if it means pricing off your advantaged raw-material supply. So why not new US polyethylene (PE) supply priced-off ethane, rather than […]
Polyethylene The “Last Man Standing”. For How Much Longer?
By John Richardson POLYETHYLENE (PE) remains almost the “last man standing”. Whereas most of the other chemicals and polymers markets in China, including phenol, polyvinyl chloride and purified terephthalic acid, are mired in almost vanished imports and poor profitability because of severe oversupply, PE appears to be fine. Take the latest import and local production […]
Oil At $25 Or Even Lower By The End Of This Year
By John Richardson AS most people react like a rabbit caught in a car headlight to the latest collapse in crude-oil prices, they need to take note of this: The long term average price of oil, adjusted for inflation, is only $33 a barrel. Why were so many misled into thinking that the natural price […]
Deflation Threatens Asia’s Ethylene-Polyethylene Link
By John Richardson AS you can see from the above chart, ever since April 1997, when we first started providing price quotes for spot Northeast Asian (NEA) high-density polyethylene (HDPE) film grade, it has been spot ethylene rather than spot naphtha prices that have driven HDPE prices. You can find the same pattern for any […]
China’s Chemicals Strategy: More Complexity
By John Richardson THE more that things change to some extent the more they stay the same in China. This is adding another layer of complexity to forecasting where the country’s chemicals industry is heading. Take this article from the New York Times as a great example, where an astonishing 155 coal-fired power plant projects […]
Not Since1992 Has Propylene Been So Cheap Versus Ethylene
By John Richardson EVER since we first started assessing Northeast Asia ethylene and propylene CFR spot prices, which was in November 1992, the market has never been like this. Propylene has never traded at such a big a discount to ethylene. To give you some details from the above chart, you need to break this […]
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