By John Richardson A NEW RESEARCH PAPER by economists Kenneth Rogoff and Yuanchen Yang underlines the scale of what is at stake for petrochemicals demand if China doesn’t blink and sticks to its deleveraging of the real estate sector. The authors found that 29% of the Chinese economy is dependent on the property sector when […]
Asian Chemical Connections
China carbon limits and Evergrande tied together as short term growth challenges build
By John Richardson Executive summary THE LIKELIHOOD that 227,000 tonnes of China’s polyethylene (PE) and polypropylene (PP) coal-based capacity is forecast to be lost to plant shutdowns in September and October this year looks at first glance to be good news for exporters to China. This would be much higher than the 43,000 tonnes of […]
Challenges facing China as it tries to bridge the rural-urban wealth divide
By John Richardson THIS COULD be the biggest event in our industry since at least the Global Financial Crisis, possibly even earlier. Do not make the mistake of underestimating the importance of China’s policy shift to “common prosperity” in your planning process. I’ve already covered some of the short-term potential implications in my posts on […]
What global petchems demand would have been like without the China property bubble warns us about the future
By John Richardson PLAYING “What if?” games by changing the course of history is popular amongst students of the subject, including myself. Imagine, therefore, in our world of petrochemicals, if China hadn’t decided in late 2008 to launch the world’s biggest-ever economic stimulus package to compensate for the Global Financial Crisis. Beijing felt it had […]
Whether Beijing blinks over Evergrande is the biggest issue for global petchems
By John Richardson WILL BEIJING blink? The answer to this question could pretty much set the direction of the global petrochemicals industry over the next six to 12 months. In my view, the question over whether the Chinese government will relax its clampdown on local real estate, which Bank of America estimates accounts for 28% […]
The perils of Evergrande for China and world polyolefins demand
By John Richardson ON THE PLUS side of the H2 China polyolefins demand ledger are the Golden Week Holidays between 1-7 October and the Singles’ Day internet sales promotion event on 11 November. The second half of the year always includes China’s peak manufacturing season, which runs from August-September until October, when Chinese factories ramp […]
Latest data show China could become PP net exporter by 2026 and net exporter of 3.7m tonnes in 2031
By John Richardson DO YOU WANT the good news or bad news first? This is of course a rhetorical question because I cannot hear what you are saying. I have therefore independently decided to give you the good news first: ICIS forecasts that only 33% of total global net imports of polypropylene (PP) will be […]
Asia and Middle East PP producers need to be more global because markets are more regional!
By John Richardson NORTHEAST ASIAN (NEA) polypropylene (PP) producers are finding it increasingly difficult to export cargoes outside their region because of ample supply elsewhere and buyers’ reluctance to accept long delivery times. Freight costs have also spiked over the recent weeks, but container freight costs still seem workable on some routes. But when you […]
China polyolefins demand declines accelerate as supply chains remain the key challenge
By John Richardson ONE OF THE golden rules that has nearly always applied over the last 20 years is that you never bet against the Chinese economy. Time and again, the doom mongers have been proved embarrassingly wrong. But we now have enough data and anecdotal evidence from 2021 to conclude that the deceleration in […]
The right analysis of China export data confirms moderate slowdown
By John Richardson STATISTICS, if you do not look at them in the right way, can be very misleading. This is the case with last week’s excitement about the growth in China’s June exports of manufactured goods. On a year-on-year basis, exports grew in dollar terms by 32.2% in June from a year earlier compared […]
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