By John Richardson THE chart below serves as an excellent illustration of the big shift in consensus thinking about China’s overall economy, as it shows that: PE imports surged in January on the belief that China would “blink” – and they remained, on the whole, strong until October. The resilience in imports persisted despite evidence […]
Asian Chemical Connections
Starting All Over Again: A Ten-Point Guide For 2015
By John Richardson AS chemicals companies go back to their budget plans for 2015, and redraw them entirely, here are ten things that they must take into account: The oil price is not going to return to $100 a barrel in a hurry, barring a major geopolitical shock – indeed, there is a chance that […]
So Much For The Bonus From Cheaper Oil
By John Richardson THE big turning point in Asian petrochemicals markets can be traced back to around the end of July for three big reasons: • It was broadly accepted from then onwards that China wasn’t going to change its policies. There would be no “blinking” via a big, old-style economic stimulus package. • The […]
US Petrochemicals Will Suffer From “The Blame Game”
By John Richardson THE chat below provides some very instructive reading as it shows that: Since 2000, overall real consumption in US polyethylene (PE) has fallen from around 12.5m tonnes to 12.3m tonnes (real consumption is domestic production plus imports, and then minus exports, with end-year adjustments made for any inventory distortions). Low-density PE […]
Asia’s Petchems Decline: Reject Tried And Trusted Analysis
By John Richardson ASIA’S petrochemicals traders and producers have on the whole done fantastically well over the last 20 years by sticking with tried-and-trusted ways of assessing markets. It is very tempting, therefore, to think that today’s weak demand will soon be put right through just a few production cutbacks. Last week, my colleagues at […]
US Polyethylene’s Weak Pricing Power
By John Richardson HERE is the thing: Petrochemicals pricing for just about every product in every region is usually pretty much set by crude oil and yet in the US, the correlation between polyethylene (PE) pricing and oil has been just 32% since 2010, according to Wells Fargo analyst Frank Mitsch. An ICIS analysis for […]
Global Polyethylene: A Painful Balancing Act
By John Richardson HERE are a few important facts about polyethylene (PE): China accounted for 30%, or 2.35m tonnes , of global imports of linear low-density PE (LLDPE) in 2013 (see the above chart). It accounted for 43% of high-density (HDPE) imports. This represented 4.73m tonnes of shipments to China. And in the case of […]
US Petrochemicals: The Way Forward
By John Richardson ANYBODY out there prepared to make a guess? How long are these fantastic earnings for US petrochemicals companies in the key polyolefins space going to last? Six months, 12 months, 18 months or perhaps even longer? The question then becomes how financial analysts, investors, stock markets and therefore companies will respond when […]
Ten Reasons Why US Petrochemicals Should Think Again
By John Richardson IT is incredibly hard to “stare a gift horse in the mouth” when your share options have soared in value and you annual bonuses, based on your company’s record-breaking profitability, have been nothing short of fantastic for the last few years. Why on earth, also, even bother to rock the boat when […]
European Petrochemicals: Making Money Despite Deflation
By John Richardson THE European petrochemicals industry has done staggeringly well since 2008 thanks to operating rate discipline, skillful inventory management and feedstock flexibility – for example, the INEOS and SABIC initiatives to import low cost ethane from the US. And in 2014, the region’s cracker operators have even been able to increase average operating […]
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