By John Richardson PETROCHEMICALS are a great barometer for economic growth as they are the raw materials for so many finished goods. So, if petrochemicals producers see their profits slip, this provides an early signal that something is wrong with wider economies. It is not just petchems producers that should therefore take note of the […]
Asian Chemical Connections
Electric Vehicles And The Collapse In Oil, Polymers Demand
By John Richardson IN THE mid-1980s, AT&T hired a consultant to estimate the level of US mobile phone ownership by 2000. They estimated 900,000. The actual number was 109 million. The petrochemicals and polymers industry is at risk of making a mistake of the same magnitude by underestimating the growth of electric autonomous-driven vehicles. […]
Asian Polyolefins Markets Still Indicate Economic Slowdown
By John Richardson ANOTHER week has led to another fall in Asian polyethylene (PE) and polypropylene (PP) prices despite higher naphtha feedstock costs on stronger crude oil. Pricing has been weak since the Lunar New Year Holidays, (15-21 February). Market participants had expected the opposite on a recovery in demand following the holidays and tight […]
Petrochemicals Markets Point To Synchronised Global Downturn
By John Richardson IF you repeat something enough times, such as the “emperor is wearing clothes”, lots of people begin to believe it. So is the case with the widespread idea that we are in the midst of an unshakeable synchronised global economic recovery. The problem with these kind of economic theories is that as […]
Stock Markets: Real Implications For Petchems and Risks Of A “Cynical Bubble”
By John Richardson WHEN stock markets are rising, the proverbial garden can look as if it is blooming with summer flowers without a weed in sight. But the underlying data suggest wealth inequality is still a major issue in the US, with the inequality creating iconoclastic politics in the US that continue to threaten a […]
The Battle To Retain Metallocene Polyethylene Price Premiums
By John Richardson THE ABOVE chart could be a sign of a long term trend where we see metallocene linear-low density polyethylene (LLDPE) price premiums over standard, or C4 grade, LLDPE film at lower levels. We have already seen C6 metallocene premiums in Southeast Asia slip ever so slightly to an average of $113/tonne from […]
Asian Petchems Profits Could Test Historic Lows In 2018
By John Richardson THE ASIAN steam cracker business has struggled to pass on higher oil prices as the above chart further underlines. As you can see, high-density polyethylene (LLDPE) injection grade spreads including selected co-products have slipped over the last few months. Spreads are a rough but still useful measure of profitability, and so tell […]
Petrochemicals Destocking Phase Likely As Crude Volatility Increases
By John Richardson WE COULD now be in a destocking phase in petrochemicals markets as oil prices are falling on a surge in US production. This would obviously mean lower petrochemicals pricing, leaving companies that have overbuilt raw material inventories with substantial financial losses. I hope that most companies have been prudent. In January, the […]
Petchems Face Major Inventory Risk As Economic Confidence Builds
By John Richardson NOBODY knows how many tonnes of un-cracked naphtha are sitting in steam cracker storage tanks around the world compared with H1 of last year. Or how much plastic resin and rolls of plastic film are being held in storage by converters. Or how many car dashboards are in the warehouses of auto […]
In One Simple Chart: The Risk For Petchems From Crude
By John Richardson Sometimes a simple chart is worth hundreds of words. A lot less than hundreds of words today, therefore, as you consider the above chart and these two key questions: If the global economy was that strong, and/or petrochemicals industry fundamentals as sound as the consensus view holds, why has there been such […]
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