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Asian Chemical Connections

Dysfunctional Oil Markets

By John Richardson “HOW do a I tell my customers that polyethylene (PE) price rises are justified by more expensive naphtha, when the market is so weak?” asked an Asia-based sales and marketing executive with a major producer earlier this month. A second executive with another producer, who has responsibility for the China market, expressed […]

PVC’s Unsustainable China Growth

By John Richardson POLYMER markets continue to tell us that China’s 2009-2010 economic stimulus programme delivered unsustainable demand growth. China’s demand for polyvinyl chloride (PVC) surged from 10.9m tonnes in 2009 to 13.2m tonnes in 2010, according to Global Trade Information Services (GTIS).  Demand then reached 14.1m tonnes in 2011. The slowdown in growth reflected government […]

China Coal-to-Olefins Ambitions

By John Richardson SOME 10-15m tonne/year of coal-to-olefins (CTO) capacity in China is being considered, has already received approval or is in the planning stage, according to a report by Woori. “Major coal companies, petrochemical companies and foreign petrochemical players are all known to be planning CTO plant construction in China’s north western regions,” says the South […]

US Chemicals Still Behind 2007

 By John Richardson US chemicals production remains way below its pre-crisis 2007 level but production in Asia-Pacific, after a brief blip in 2009, continues to soar, according to these charts from the American Chemistry Council. Whereas US producers have carried out few capacity expansions since 2007 and are runnning existing plants at lower operating rates, […]

US Chemicals Slowdown

US PE contract pricesBy John Richardson THE American Chemistry Council’s Mid-Year Situation and Outlook Report, which was released this week, helps explain the background to the weakness in demand seen in the US polyethylene (PE) market. What goes for PE will, of course, apply to the rest of the US petrochemicals business. In the case […]

China Still Destocking

  By John Richardson A NEW report from HSBC supports our argument that China’s synthetic resin market has yet to bottom out. Big structural changes in China’s economy are an additional factor, in our view, to the slowdown in China not covered in the comments below. The bank highlights, of course, the weak business environment […]

US Polyethylene Targets China

  By John Richardson SIGNIFICANT volumes of US polyethylene (PE) are heading to China as the States attempts to compensate for weaker domestic sales, understands the blog. Despite the fall in US prices, margins remain strong, creating arbitrage opportunities. US May contracts for polyethylene (PE) settled down by 7 cents/lb ($154/tonne, €125/tonne) from April, following […]

Stimulus Nonsense Raises Hopes

By John Richardson EARNINGS estimates for South Korean petrochemical companies will have to be cut by 50 percent for the full year 2012, said an industry observer. “It is quite clear that the first quarter was dreadful for the South Koreans and the second quarter will probably be even worse,” he added. There was a […]

China PE Demand Falls Six Percent

By John Richardson The 6% decline in apparent polyethylene (PE) demand in China from January to April this year, compared with the same periods in 2011 and 2010, underlines what market participants have been telling the blog for many months. The above chart also further emphasises how, in a weak market, the Middle East is […]

PE Middle East Offers Keep Falling

By John Richardson POLYOLEFIN markets are not going to bottom out until August-September at the earliest, according to several producers and traders who the blog spoke to yesterday. And even if prices do eventually stop declining, confidence has all but disappeared that there will be any substantial recovery in either pricing or demand for the […]

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