By John Richardson Wen Jiabao re-emphasised at the weekend that China’s economic policy would be tweaked rather than radically overhauled because inflation, despite declining further in April, remains a major threat. Anybody hoping for a stimulus package on the scale of that which was introduced in late 2008 is therefore likely to be disappointed. And […]
Asian Chemical Connections
The Worst Things Get The Better They Are
By John Richardson THE more that China’s economy weakens, the greater the hope of a recovery in the second half of this year. This type of thinking was in evidence last week. The release of a raft of disappointing economic data for April boosted the confidence of some people in the petrochemicals industry that China’s […]
China’s Inflation Challenge
By John Richardson In our third post on the context behind last week’s steep fall in polyolefins prices,and the prospects for a recovery, we look at inflation – one of China’s numerous economic challenges…..I NFLATION remains a major threat in China, hence the government is unable to make the cuts in interest rates necessary to […]
Asian Polyolefin Prices Tumble
By John Richardson Asian polyethylene (PE) prices slumped by $90-130/tonne last week on the eurozone crisis, the fall in oil prices and the imminent arrival in China of large volumes of Iranian material, according to ICIS pricing. A further factor dragging down the market was the start-up, expected by end-May, of Qapco’s low-density polyethylene (LDPE) […]
China Economic Optimism
By John Richardson ECONOMISTS think China’s growth has bottomed out, thanks to unexpectedly strong March bank lending. They also think that interest rates will stay low for a long time, even if rates cannot be cut because of the inflation problem. New loans in March totalled Rmb1trn ($159bn), more than banking analysts had expected. This renewed […]
MEG’s Fading Star
By John Richardson CHINA’S mono-ethylene (MEG) market was supposed to be very strong this year. But instead, to date we have seen persistently weak market conditions that few people, least of all the traders, seem to have anticipated. The traders appear to have been taken in by the hype and booked cargoes for delivery […]
China And Inflation
By John Richardson MUCH excitement heralded the announcement that February inflation in China had fallen to a 20-month low of 3.2 percent – well within the government’s annualised target of 4 percent. This led to the belief that the government would boost bank lending, and maybe further low bank-reserve requirements and interest rates. No doubt this […]
China Auto Sales Point To Long-term Shift
By John Richardson The impact of Chinese government policy adjustments on petrochemicals demand was further highlighted late last week, when auto-sales figures for January-February were released. Sales declined by 4.4 percent, the worst two-month start for the industry in seven years, with local-brand sales falling by 17 percent. This is sure to dampen the mood […]
A Palpable Sense Of Panic
By John Richardson THE blog has sought to add to the debate during the four years it has been operating by thinking around the big macro-economic issues, and constantly keeping in touch with our market contacts at “ground level” in the petrochemicals industry, in an attempt to assess where markets might be heading. We haven’t […]
US Cooks The Golden Goose
By John Richardson THE blog would sincerely like to find evidence that it has been wrong and report a strong, sustainable recovery in China’s polyethylene (PE) market. Alas, however, the rise in pricing of around $100/tonne over the last four weeks appears to have been almost entirely the result of increased trader activity and producers […]
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