By John Richardson THE ABOVE chart shows that in April the average spread between CFR Japan naphtha feedstock costs and CFR Northeast Asia (NEA) benzene prices was just $19/tonne, its lowest level since January 2009 during the Global Economic Crisis. AS with Doctor Copper, benzene is a major raw materials building block for many manufacturing […]
Asian Chemical Connections
Longer trade war: Impact in numbers on China polymers demand
By John Richardson WE MUST now start to quantify the impact on the petrochemicals industry of no end to the US/China trade war during 2019. Economists at Barclays estimate that a 25% US tariff on $200bn of exports could cut Chinese growth by half a percentage point over 12 months, and as much again if […]
China PE demand boom will not stop further margin declines
By John Richardson CHINA’S polyethylene (PE) market is being temporarily weighed down by overstocking which is the result of the big surge in March imports. Many of the arrivals in March were of material booked late last year when oil and so PE prices were falling, drawing traders and Chinese buyers into major commitments. This […]
China holds all the petchems demand aces as it digs in for longer trade war
By John Richardson THE STRENGTH of China’s position in the intensifying trade war is further underlined by the above chart. In everything from oil and gas through to petrochemicals and finished goods, China is the world’s biggest market. Minus off China from consumption and many other developing countries, and even entire regions, can sometimes almost […]
China 2019 PE demand grows in double digits as PP struggles
By John Richardson CHINA’S polyethylene (PE) and polypropylene (PP) markets continue to tell us something very important about the broader economy. In PE, Q1 net import and production data when annualised for the full-year 2019 implies demand growth of 11% over last year. This would be even higher than in 2018, when consumption compared with […]
China inland polyethylene growth: The big unanswered question
By John Richardson IF China played an insignificant role in global polyethylene (PE) demand the above chart would not matter. Few people would care about the latent potential of China’s 21 relatively poor mainland provinces if China were as unimportant as India and the Asia & Pacific region. “Surely not? India and Asia & Pacific […]
China’s economy is not recovering say petrochemicals markets
By John Richardson IF YOU only read the financial press and follow the stock markets you can be entirely forgiven for thinking that China’s economy has turned around as a result of huge injection of economic stimulus. But anyone whose job it is to follow petrochemicals markets should know that the jury is still out […]
Weak China polypropylene demand in January-April indicates no big new economic stimulus
By John Richardson THE ABOVE chart should give you pause for thought if you believe that the Chinese economy is already recovering as a result of major new economic stimulus. This once again points to the value of chemicals and polymers as leading indicators of economic activity. A recovery might be around the corner thanks […]
A tale of two polymers in China: ICIS 8th World Polyolefins Conference presentation
WE HELD our 8th World Polyolefins Conference in Vienna last week where I presented this paper on the China market. Polymers that go into durable end-use applications in China, such as PP, are more vulnerable to credit cycles and the decline in GDP growth than is the case with polymers such as PE. PE is […]
New ICIS podcast: Searching for a better way to forecast China
By John Richardson Click here for my latest interview with Will Beacham, Deputy of ICIS Chemical Business (go to the Download Episode icon, download and listen), where I discuss the great black hole that is always China. The long standing problem remains the unreliability of data for the world’s most important chemicals markets. I […]
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