By John Richardson US feedstock advantages appear to provide an almost overwhelming case for a big wave of cracker and downstream investments, particularly in polyethylene (PE) and polypropylene (PP). In contrast, Europe is struggling with much-higher feedstock costs and low economic growth, resulting in the possibility of many more capacity closures. Only last week, for […]
Asian Chemical Connections
Europe’s Economic “Recovery”
By John Richardson EUROZONE GDP expanded 0.3% in the second quarter of this year and it will probably also have expanded in Q3. As a result, if you view the end of a recession as two consecutive quarters of positive growth, the champagne corks should perhaps be popping. Europe’s politicians have seized on the […]
China PE Demand In 2013: Flat Or Declining
By John Richardson SENTIMENT continues to severely undermine polyethylene (PE) demand in China as converters, lacking confidence in a big new economic stimulus programme later this year, keep their raw-material purchases to an absolute minimum. “It used to be the case that our customers bought four containers at a time. Now it’s down to two,” said […]
Players In Europe And Asia Are Serious About Cheap US Ethane
A fascinating guest blog post by my colleague, Nigel Davis (see below) explores how excess US ethane supply could help raise the competitiveness of European and US crackers. Provided, of course, that there is sufficient demand. By Nigel Davis IT is becoming clear that European companies aside from INEOS are looking seriously at importing ethane […]
The First Quarter Financial Results Dilemma
By John Richardson EUROPEAN olefins markets have turned decidedly bearish, according to my ICIS colleague, Nel Weddle. “Although the lack of pre-buying in February ahead of a much talked-about increase for March contract prices had been deemed a bearish signal, the one positive was that, up until now, demand levels were fairly stable,” wrote Nel, […]
Death By A Thousand Cuts
By John Richardson COST cutting and disciplined operating rates have been two of the factors that have helped maintain European cracker and polyethylene (PE) profitability at pretty healthy levels since the onset of the global financial crisis in 2008. So too has the European cluster concept, where producers can share ethylene via pipelines and where […]
SABIC’S Al-Mady Issues Europe Warning
By John Richardson MOHAMED Al-Mady, the CEO of SABIC, told the Financial Times yesterday that he worries about Europe losing out on petrochemical investments because of its reluctance to embrace shale gas. “Some European companies already made the decision to go into shale gas, so naturally when they do not there will not be development,” he […]
European Petchems Face Tough Choices
By John Richardson AT LEAST one global polyolefins producer is rumoured to be shipping increased volumes of resin from the US to Europe in response to the shale gas-derived shift in competitiveness. “Dow Chemical CEO Andrew Liveris is making a call on the global economy – one of multi-year slow growth – and adjusting […]
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 […]
Global Polyethylene Margin Picture
By John Richardson ASIAN high-density polyethylene (HDPE) margins have improved in June and July compared with the rest of the year, according to the above chart from the ICIS Weekly PE Margin Report. But the overall year-to-date trend illustrates how the industry has lacked pricing power as a result of persistently weak Chinese demand. August […]
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