Source of graph: Reuters By John Richardson THE Federal Reserve has got it badly wrong, and could compound its mistake by launching a third round of quantitative easing (QE3), warns Ruchir Sharma, head of emerging markets and global macro at Morgan Stanley. “The first two rounds of quantitative easing fuelled a commodity bubble, increased […]
Asian Chemical Connections
KPMG Warns Of US Overcapacity
By John Richardson A management consultancy has gone on the record to warn about what the blog has been warning about for months: That the US petrochemicals industry is in danger of pushing itself into oversupply. KPMG, in a report released late last month, said that the success of planned US expansions, including as […]
Global Economy Loses Suspension
By John Richardson ISN’T it interesting how when you talk to someone involved in a petrochemicals project, either publicly or privately, their project is very often sufficiently to the left of the cost curve to gain a winning advantage over competitors? Discussions are almost entirely about feedstock advantage, production and logistics efficiency and location etc. Thus was […]
Feedstock Assumptions A Risk
By John Richardson THE feedstock landscape can change very rapidly as the shale-gas revolution amply demonstrates. But the assumption, right now, is that the landscape will not undergo any further radical changes. As a result, as much as 7.65m tonne/year could be added to US ethylene capacity by 2017. That would represent a 29 percent […]
China To Grow at 3 Percent
By John Richardson THE possibility that China’s economy may not expand as rapidly in the future as in the past is never discussed in public by resources-company CEOs, said an Australian-based stockbroker. His comments ring true for petrochemicals, also. The blog is struggling to find a senior executive willing to discuss this possibility on the […]
Polyolefins And China Real Estate
By John Richardson SOME polyolefin companies continue to present an optimistic picture of markets to investors. They point to positive factors such as renewed economic stimulus in China and a recovery in auto production in Thailand following last year’s floods. But, as we said yesterday, those involved in the day-to-day grind of trying to […]
Costly Oil Hurts US Industry
By John Richardson THE higher that oil prices go the more the US petrochemical industry’s margins have expanded. Petrochemical prices are oil-driven and, therefore, have to go higher as crude becomes more expensive, whereas the cost of shale gas-based ethane keeps on falling due to rising supply. US petrochemical producers are cracking increasing amounts of […]
Europe Markets Lure Asian Polyolefins
By John Richardson EXACTLY the same scenario is playing out in European polyolefin markets, as in Latin America and possibly the US, my ICIS colleague Linda Naylor reported last Friday. High polyethylene (PE) and polypropylene (PP) prices in Europe have led to increased offers for re-exported material from China, according to Linda – our European […]
Investors Predict Strong Petchems Rebound
By John Richardson POLYETHYLENE (PE) inventory levels are thought to be so low at the converter end of the business in China that a case is being made for a strong recovery in demand and pricing post-Lunar New Year. A further factor behind the anticipated rebound are forecasts of further credit easing by the Chinese […]
The Risks Of Being An Outlier
By John Richardson THE blog has been mystified throughout this year over why senior industry executives appear to remain “in denial” over the weakness of global petrochemicals markets. Time and again we have heard the comment that the falls in demand were only the result of de-stocking. The public mood of the industry has soured […]
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