By John Richardson WE ALL NEED TO ASK ourselves whether the global patterns in polyethylene (PE) and polypropylene (PP) pricing and margins that we have seen over the last year represent a long-term divergence in global markets or something temporary. As discussed on Monday, when I examined linear low-density PE (LLDPE) market (and the same […]
Asian Chemical Connections
Global polyethylene could move from inflation to deflation by as early as Q1 2022
By John Richardson THE BALTIC DRY INDEX, one of the excellent barometers of overall economic activity, was late last week at its lowest level since June on a slowing Chinese economy, easing congestion at Chinese ports and a fall in Chinese coal imports (more on this in a moment). “The index was around 1,000 a […]
As China coal shortages end, polyolefins margins reach historic lows on oversupply
By John Richardson AGAIN, DON’T say I didn’t tell you. In my 11 October blog post, having talked to people who know what they are talking about, I flagged up the possibility that China’s energy shortages could be fixed a lot quicker than many people were suggesting. Those in the know about China told me […]
Dip in Chinese PP exports only temporary with Q1 2022 resurgence looking likely
By John Richardson TRADE DATA when combined with price assessments, supply and demand estimates and market intelligence is the modern-day equivalent of alchemy with a rather important difference: we can genuinely convert numbers and conversations with the market into gold, unlike the bogus science of alchemy. A great example is the chart below, the first […]
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 […]
China could either see net imports of 63m tonnes in 2021-2031 or net exports of 18m tonnes!
By John Richardson CONFUSED BY the above chart? Once again I certainly hope so, provided confusion is not followed by blind paralysing panic. The chart, showing three scenarios for China’s net polypropylene (PP) imports in 2021-2031, follows last week’s chart of 2021-2031 high-density polyethylene net imports. Confusion is valuable because we need to go back […]
After the COP26 disappointment, the “blame game” will get us nowhere
The implications of last week’s disappointing COP26 meeting in Glasgow are so complex and so numerous that is going to take more than one blog post to provide adequate coverage. In this first post, I look at the failure of COP26 to agree on a global carbon tax, in my view essential, and discuss the […]
China polypropylene demand growth continues to disappoint as new capacity uncertainties increase
By John Richardson CHINA’S POLYPROPYLENE (PP) demand will very likely still grow in 2021 despite what has been a disappointing year relative to expectations. My latest estimate is for consumption to grow by 3% over last year. This is based on China Customs net import data and our local production estimates for January-September 2021. As […]
China’s “Common prosperity” uncertainties multiply as we head into the unknown
By John Richardson DON’T SAY I didn’t warn you. This article in The Wall Street Journal confirms my warning that Xi Jinping’s “common prosperity” reforms would face resistance from vested interests. China’s president Xi is having to dial back plans for the introduction of widespread property taxes, according to WSJ. “China has experimented with a […]
China provides major climate hope as latest IEA report underlines that it is all about the developing world
By John Richardson WHEN I worked for a UK local newspaper as a “cub” or junior reporter in the 1980s, there was a major international air crash. “Find out if there was anyone from our city on the flight,” my news editor instructed me. In my naivete, and because of lack of training, I was […]
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