By John Richardson HOPEFUL theories espoused by traders can sometimes sound a little hollow – as was the case with the one doing the rounds in Asian polyolefin markets late last week. “We think the latest interest rate rise in China will be the last this year and so, in a way, the announcement was good […]
Asian Chemical Connections
Impact of China’s Latest Rate Rise – Part 1
Here is the first of two posts that will analyse the implications of China’s decision to raise interest rates for the third time this year By John Richardson CHINA’S decision to once again raise interest rates will put further pressure on the hard-pressed small and medium-sized enterprises (SMEs) that make up the bulk of the country’s chemicals and polymer […]
European PE, PP Contracts Likely To Fall
By John Richardson EUROPEAN polyolefin converters seem quite justified in pressurising their suppliers for further price reductions, given weak macro-economic fundamentals and still-excellent profitability at the cracker end of the value chain. The news from China continues to get worse. China’s Vice-Premier Wang Qishan said last week that the government’s 2011 targets for GDP growth and […]
China Auto Market Provides Clear Evidence
By John Richardson DESTOCKING is obviously not the main driver of the decline in China’s polyolefins market, despite what a dwindling band of optimists are still arguing. The glaringly transparent reason for the fallacy of the fading belief is a decline in key end-use markets for polyoleifins – and for other polymers and chemicals. Today […]
PE Market Weakness Spreads To US
By Malini Hariharan After Europe, the US polyethylene (PE) market has started showing increasing signs of weakness. Spot offers have rapidly fallen putting downward pressure on June contracts that are currently under negotiation. Producers may have no choice but to settle at lower levels as exports to Asia is no longer a viable option. Spot […]
Chemicals Buying & The IEA Decision
By John Richardson CHEMICALS and polymer demand looks even less likely to be supported by “buying forward” following yesterday’s decision by the International Energy Agency (IEA) to release 60m barrels of crude into the market. Here is a bit of context first before we look at the implications of the IEA decision, which, along […]
US Olefins, Polyolefins In Denial
By John Richardson THE majority of financial analysts seem to be clinging on to the hope that the recovery in petrochemicals demand from China is about to happen. This doesn’t just apply to our industry. Analysts across many sectors appear to have staked their reputations on a return to the Old Normal of booming […]
Chemical Shares Fall From “Buzz Mountain” Summit
By John Richardson CHEMICAL share prices have surged to the top of what one industry observer calls “buzz mountain” during the last six months. The buzz has been centred on the supercycle theory which holds that recent corrections in commodity prices are nothing more than a temporary blip. Formosa Plastics Corp (FPC) and Formosa Chemicals […]
Misplaced Faith In China Recovery
By John Richardson WEAKER domestic consumption-growth in China represents a major challenge to the argument that global petrochemicals demand, and therefore pricing, will see a strong recovery during 2011. Price declines continued last week with low-density polyethylene (LDPE) down a further $20-50/tonne as the polymer, as we have reported before, continues to be dogged by […]
Ethylene And PE Markets Decline Continues
By John Richardson THE decline in Asian and European ethylene and polyethylene (PE) markets continued last week with no sign of the recovery that producers still hope will take place by end-June at the latest. Asian ethylene prices slipped by a further $60-70/tonne to $1,130-1,170/tonne FOB Korea to reach a six-month low, according to our […]
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