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 […]
Asian Chemical Connections
An All Mighty Dalian Muddle
By John Richardson UNDERSTANDING the Dalian Commodity Exchange’s futures contract in RMB-priced linear low-density polyethylene ((LLDPE) requires an understanding of what the traders are up to at any particular point in time, as this is almost entirely a speculators’ market. So, what happened late last year is very illuminating. The chart below shows a sharp spike […]
Seeing Through The Smokescreens
By John Richardson CHEMICALS traders and the financial community, quite obviously, benefit enormously from volatility. Thus we have seen certain chemicals markets being talked-up by the trading community on the basis that the post-Lunar New Year period will see a surge in demand. Equally, the job of the financial community at the moment is to […]
The Fragility Of the Recovery Story
By John Richardson A VERY illuminating discussion with a Shanghai-located sales and marketing manager for a major Asian polyolefin producer reveals how the post- Lunar New Year “recovery” story being sold by the investment community is on even more shaky ground than we at first thought. Three points worth highlighting, before we publish verbatim what he said, […]
Difficult Year For Naphth-based PE
By John Richardson THE first quarter of the 2012, and very probably the rest of the year, look likely to be very difficult for Asia’s naphtha-based polyethylene (PE) producers as a result of more competition from the Middle East in the vital China market. The other big negative factor looks likely to be Chinese demand […]
China’s Debt Problems
By John Richardson Fellow blogger Paul Hodges made a convincing case in a post on Tuesday that China’s economic model faces some major challengs. “It seems increasingly clear that China‘s economic policy took a wrong turn 10 years ago, when it joined the World Trade Organisation,” wrote Hodges. From 2001 onwards, China transformed itself into the […]
Polyolefins In “Chaos And Panic”
By John Richardson CHINA’S polyolefin market was in “total chaos and panic” this morning, according to a Singapore-based trader. The Dalian Comodity Exchange’s futures contract in linear low-density polyethylene (LLDPE) fell a further 5% this morning after declines earlier in the week, according to ICIC news. The weak futures markets caused a supply surge in the […]
Cosy Platitudes Are Not Enough
By John Richardson DO you trust your government to always get it right? The answer in the case of the West is “of course not”, but in China’s case the publicly-expressed assumption still holds that the economy is being effectively managed. CEOs of chemicals and polymer companies might find it politically challenging to openly say […]
The Edginess, The Nervousness Continues
By John Richardson THE edgy and nervous nature of the recovery in Asian polyolefin markets became even more apparent from discussions the blog held with traders and producers during a visit to Singapore last week. Such was the uncertainty that there were mid-week reports of falls in pricing. By Friday, though, one producer told us […]
Polyolefins At A Tipping Point
By John Richardson EUROPEAN polyolefin markets are at one of those fascinating tipping points following the recent price recovery. Ethylene spot prices rebounded late last week with July sales much better than those in June, wrote Nel Weddle, European ICIS pricing olefins editor, in this report. Propylene, however, remained under pressure because of a long market. […]
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