By John Richardson HOW the world has changed. Dan Loeb of the Hedge fund, Third Point, wrote in a letter proposing a spin-off of Dow Chemical’s petrochemicals assets: “We suspect that Dow’s push downstream has led the company to use its upstream assets to subsidise certain downstream derivatives, either by sacrificing operational efficiency or making […]
Asian Chemical Connections
India Gas Price Breakthrough
By John Richardson DEMOGRAPHICS can drive chemicals demand in the right direction, provided the correct government policies are in place. India’s demographics are much better than China’s, as this data from the CIA Factbook indicate. For instance, as of 2013 India’s median age was 26.7 years compared with 36.3 years in China. India’s birth rate […]
Australia, China And “Social Accounting”
By John Richardson WESTERN Australia is still in the midst of the tail end of a golden economic sweet spot, thanks to a once-in-many-generations resources boom. People are not only benefiting from the fantastic money that is being made by working in the iron ore, gold mines and liquefied natural gas (LNG) plants. All those […]
Gas, Gas, And Perhaps Even More Gas
By John Richardson THE global petrochemicals industry is stepping on the gas as it accelerates both capacity expansions and the restructuring of existing assets. Apologies for the pun. In the US, of course, some 25m tonnes/year of ethylene capacity is due to be added, most of it after 2017, thanks to big volumes of cheap […]
US Housing: The Demand Conundrum
By John Richardson WEALTHY people don’t buy most of the world’s chemicals and polymers production because there are not that many wealthy people in the world – especially in the US these days. The Economist, in it’s the World In 2014 magazine, writes of the US economy: “Much of the growth in GDP has gone […]
China In 2014: Some Predictions
By John Richardson IT was a year to remember, for the right reasons, for anybody who bet on a recovery in Chinese polyethylene (PE) demand. Back in May, it was all doom and gloom. But since May, thanks to a surge in the availability of credit, apparent demand (local production plus imports) has bounced […]
The Minority Isn’t Always Wrong
By John Richardson “I REALLY worry about the ability to export extra capacity from the US as I think global markets will become much more regional,” said a source with a poylolefins producer . “The US is also pretty much a saturated market because of high existing levels of polymers consumption [see the above graph] […]
Global Growth Outlook: Sorting Out The Continuum
By John Richardson WHAT do you do for a living? Are you a speculator in equity markets or do you make things for a living? These, we think, are highly relevant questions as we head towards the New Year. It is a continuum, though, in the sense of this definition of the word: A continuous sequence […]
Oil Market Risks For 2014
By John Richardson PAUL Satchell, the UK-based chemicals analyst with glob investment bank Cannacord Genuity wrote in his December Volume Proxy* report, which was released earlier this month: “It has long been our opinion that real demand fundamentals in commodity chemicals have been so poor since mid-2010 that inventory cycles have become the prime determinant of […]
The US Growth Conundrum
By John Richardson WHERE is the growth in the US economy going to come from to consume the big increase in the country’s ethylene and derivatives production due to take place from 2017 onwards? This is a question that continues to trouble the blog when we study charts such as the one above. It is […]
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