By John Richardson CONVENTIONAL analysis, which assumes that the world of the last six years will be the world of the next six years, is failing. One of the most obvious examples of this is China, where one-dimensional, lack-of-depth conventional thinking still maintains that the rise of the country’s “middle classes” will result in a […]
Asian Chemical Connections
Want Oil Prices Back At Above $1OO? Be Careful What You Wish For
By John Richardson WE worry that quite a few people still don’t get it on crude oil. Here is why: As recently as July, as the chart above from the latest BP Energy Review shows, oil prices were from 2009 until July of last year were close to costing 5% of global GDP. At this […]
As Easy Money Ends, Time To Unblock The Plughole
By John Richardson YOU cannot fix a blocked plughole by pouring in more water. This is the core message of this very important FT Alphaville blog post, which tells us that: While Western central banks have done their best to stimulate new credit creation, a lack of good-enough returns from the real economy means that […]
Oil Prices at $50 or $150 In 2015? Take Your Pick
By John Richardson REAL price discovery is finally returning to oil markets after years of incredibly harmful central bank stimulus which put the market largely in the hands of the speculators. But now actual supply of and demand for oil suddenly matter again as central bank stimulus is withdrawn in the US and in China. […]
Oil Markets: The Failure Of Accepted Wisdom
By John Richardson THE illusion of a strong global economy has been created by central bank stimulus – via the Fed and, much more importantly, via China. And the illusion of a strong global economy was accompanied by the “illusion of scarcity” in crude oil, when, in fact, inventories have been high for years as […]
China Coal-To-Olefins “A Net Water Producer”
By John Richardson IT has become the accepted wisdom over the last few years that the coal-to-olefins (CTO) process in China consumes a lot of water. This theory has been expressed in so many conference papers and in research papers that this “truism” is part of just about every discussion on the viability of CTO […]
China’s Polyolefins Supply Surge: The Bigger Picture
By John Richardson ON paper, the polyolefins supply surge in China during 2014 is huge as it involves: Some 2.2m tonnes/year of new polyethylene (PE) capacity, according to this ICIS news article. No less than 4.1m tonnes/year of new polypropylene (PP) capacity. To put this into context, China’s total effective capacity was estimated by ICIS […]
Global Petchems Industry Must Prepare For More Difficult 2015
THE direction of Asian polyethylene markets, once again, serves as a good guide for the overall global petrochemicals industry. Producers in every region and in every sector of our industry should, therefore, take note of what follows. They must prepare for what we worry will be a much more challenging 2015. By John Richardson […]
Finding A Home For US Polyethylene Expansions
By John Richardson EVEN if you take a benign view of the future of the US economy (which, separately, we think is the wrong view), the planned increases in US polyethylene (PE) capacity still raise this very important question: Where on earth will all of this stuff go? The chart above illustrates our assessment of […]
What A “Low Growth World” Really Looks Like
By John Richardson ONLY six new US crackers would be built over the next five years because of rising construction and labour costs, said Dow Chemical’s CEO, Andrew Liveris, in an earnings conference call last week. This would be out of the 12 crackers that have been announced (see the above table). Demand would therefore […]
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