By John Richardson IN SEPTEMBER last year, I had thought that China might raise its ethylene capacity by as much as 71% by as early as 2022 over its end-2017 level of 23.5m tonnes. Now, though, our updated data show the potential for a staggering 113% increase over the next four years, when you look […]
Asian Chemical Connections
China’s 74% Fall In High-Risk Lending Points To New Slowdown
By John Richardson THE above chart should give you a feeling of déjà vu. In early 2014, Chinese lending growth started to decline and by September of that year, broad recognition of the extent of the decline was behind a sharp retreat in global commodities prices as the global economy also slowed. History very often […]
China Scrap Plastic Crackdown: 1-2% Boost To Polyolefins Demand
By John Richardson THE DECLINE in China’s imports of scrap or waste plastic and cardboard could boost 2018 virgin polypropylene (PP) consumption in China by some 1% above our base case. Meanwhile, polyethylene (PE) demand may be 2% higher For details on what this would mean in terms of tonnes, subscribe to our monthly Asia […]
China Shadow Lending Down By 70% With Deleveraging To Continue
By John Richardson The ABOVE CHART shows that lending via China’s shadow banking system fell by no less than 70% in January-February 2018 over the same period last year. This follows the 90% year-on-year fall in January 2018. The latest data underline the key conclusion that lending via the highly speculative shadow lending system is […]
China’s Polyethylene Market: Three New Scenarios For 2018-2025
By John Richardson THE above slide underlines the growing complexity surrounding China’s economy, politics, society, environmental policies and trading relationship with the US. I’ve placed this complexity in the context of the implications for the polyethylene (PE) industry. The above slide, and the full explanation below, updates my three scenarios from last September. These new […]
China Accelerates Pollution Campaign In 2018: Implications For Chemicals
By John Richardson ON THE surface of things there will be no let up when China’s winter air pollution campaign ends in March, as I predicted would be the case. China is drawing up plans for tougher curbs on smog levels during the two years until 2020, with the details due to be released in […]
Asian Naphtha-PE Spreads Collapse By 80% As 2018 Challenges Build
By John Richardson ASIAN naphtha-to-polyethylene (PE) spreads collapsed by 80% in the first week of January compared with December last year because of the failure to pass on the rise in naphtha feedstock costs resulting from higher oil prices. In an update of the chart I’ve been running since late last year, what you see […]
2018 Oil and Petchems: Risk Of Mistaking Apparent For Real Demand
By John Richardson PERHAPS the most important recent single paragraph of analysis, in the huge volume of analysis out there about oil markets, was this from Nick Cunningham in a 24 December article on oilprice.com: The [global crude] inventory surplus [OECD numbers] has dramatically narrowed this year, falling to just a little more than 100 […]
China Pollution Campaign: 2018 Chemicals Market Opportunities, Challenges
By John Richardson XI JINPING mentioned the environment no less than 89 times during his three-and-a-half hour opening speech during October’s 19th National Party Congress. China’s president did, however, refer to the economy 70 times during that same speech, but his whole emphasis was on the quality rather than quantity of growth. Evidence to support […]
China’s Pollution/Economic Campaign To Reshape Petchems
By John Richardson I BELIEVE that China’s environmental crackdown will continue to disrupt petrochemicals and polymers markets for the next few years. This is not a temporary phenomenon that will largely go away with the end of the September 2017-March 2018 campaign to minimise air pollution in 28 northern cities. Further waves of environmental inspections […]
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