WE HAVE BEEN here before, of course. In April 2020, pessimism abounded about China’s growth prospects that turned out to be unfounded because of the extraordinary strength of its post peak-pandemic recovery. But circumstances that led to the economic rebound in the second half of 2020 were very different.
Asian Chemical Connections
China polyolefins: several years of history pass in just one week
LAST WEEK I challenged whether the longstanding “put option” for petrochemicals companies and investors would still apply to China 2022.
The put option rests on the well-proven notion that the worst things get in the short term, the better the immediate outlook because Beijing always rides to the rescue with big economic stimulus.
The challenge I posed to the put option was that China might only tinker around the edges of its Common Prosperity economic reforms.
European polyethylene: Ukraine and the supply risks
By John Richardson SECURITY OF SUPPLY is a critical concern for European polyolefins producers and buyers because of the risks of interrupted Russian oil and gas supplies. You cannot, of course, run polyolefins plants without sufficient energy supplies. So, in order to support European readers of the blog, let me start with some headline energy […]
Petrochemicals transition to Net Zero to result in new margin and cost curve drivers
The petrochemicals or chemicals (depending what you prefer) transition to Net Zero is both connected and different from the energy transition for reasons I’ll detail in a series of blog posts, starting today with a few headline thoughts on how global margin and cost curve positions my change over the next few years – and […]
New scenarios for 2022 US PE exports as volatility and uncertainty increase even further
By John Richardson CONFUSED? If so, you are fully across what’s happening in the global polyethylene (PE) market. Anyone who isn’t confused is likely taking a vacation on Mars with no means of communicating with Planet Earth. The chart below is a case in point. What you can see from the data are actual US […]
China LDPE: Final review for 2021 and outlook for the rest of this year
Today I complete my series of posts on China’s polyolefins markets in 2021 with outlooks for 2022. This post focuses on low-density polyethylene (LDPE), following my earlier posts on polypropylene (PP), high-density PE (HDPE) and linear low-density PE (LLDPE). By John Richardson DO YOU want the good news or the bad news first? This is […]
China 2021 polyethylene demand could be 1.9m tonnes lower than last year
By John Richardson WE NOW HAVE enough data to make some firm conclusions about what the Chinese polyethylene (PE) market will have looked like in 2021. We can also make some early estimates about the shape of the market in 2022. The slide below details what the ICIS apparent demand data for January-October 2021 (our […]
Global polyethylene supply could lengthen, becoming a buyers’ market, sooner than many people think
By John Richardson RARELY, IF EVER, have events felt so bafflingly complex in the global polyethylene (PE) business. Take as an example the chart below listing the factors that have reshaped demand since the beginning of the pandemic. Let’s go through these factors one by one, box by box. It is reasonable to assume, starting […]
The perils of Evergrande for China and world polyolefins demand
By John Richardson ON THE PLUS side of the H2 China polyolefins demand ledger are the Golden Week Holidays between 1-7 October and the Singles’ Day internet sales promotion event on 11 November. The second half of the year always includes China’s peak manufacturing season, which runs from August-September until October, when Chinese factories ramp […]
China polyolefins demand in 2021 could be 6.5m tonnes lower than expected with imports a lot weaker
By John Richardson NOW we must be very careful here. Time and time again, Chinese polyolefins growth has defied the doom mongers. Just look at 2015 as a prime example, when, despite a mild economic downturn, polyethylene (PE) and polypropylene (PP) consumption growth surprised on the upside, largely because of a surge in internet sales. […]