By John Richardson THE IRONY IS that if the US trade deficit with China shrinks because of the trade war, its deficits with other developing countries may continue to increase as manufacturing chains are shifted away from China to avoid tariffs. The longer this situation continues, the more likely it could be that the US […]
Asian Chemical Connections
China PP demand growth still heading for seven-year low despite surge in imports
By John Richardson ALL is not suddenly right with China’s polypropylene (PP) demand despite our revised data for January-April 2019 indicating growth is back on target to hit our forecast for the full year 2019 of around 6%. We had earlier placed January-April 2019 demand growth at just 2% compared with the same months last […]
Symptoms worsen for Dr Benzene and China economy as trade war accelerates
By John Richardson THE ABOVE chart is again telling us something very important about the real state of the Chinese economy. It shows Northeast Asian (NEA) benzene pricing spreads over naphtha feedstock costs, (NEA pricing is in effect a China price as of course China dominates the NEA region). Dr Benzene, as with Dr Copper, […]
Vietnam PE demand booms on trade war, but for how much longer?
By John Richardson GLOBAL manufacturing supply chains are adjusting to the US tariffs against China, accelerating a process that began a decade or so ago because of China’s ageing population versus more youthful populations elsewhere. Let’s use Vietnam as an example to first of all examine the longer term drift away from China. Since 2010, […]
China trade war self-reliance push threatens ethylene glycols and PP imports
By John Richardson CHINA WILL do what suits China and not what suits the rest of the petrochemicals and polymers word. And what suits China has radically changed because of the new US approach to international relations. No longer can China depend on the US, or indeed any other country, for the petrochemicals imports it […]
China MEG spreads turn negative on 171% rise in US retail prices for Chinese clothing
By John Richardson THERE are a lot of theories out there about why the spreads between Chinese mono-ethylene glycols (MEG) prices and naphtha feedstock costs have fallen in April and May of this year (see the above chart). But as I shall explain in detail later on, the only explanations that entirely stand up are […]
Longer trade war: Impact in numbers on China polymers demand
By John Richardson WE MUST now start to quantify the impact on the petrochemicals industry of no end to the US/China trade war during 2019. Economists at Barclays estimate that a 25% US tariff on $200bn of exports could cut Chinese growth by half a percentage point over 12 months, and as much again if […]
President Trump’s Tweets increase risk of no trade deal until 2021
By John Richardson THE PROSPECTS of a trade deal seem to have have faded into the distance as a result of Tweeted threats from President Trump that the US will raise tariffs to 25% from 10% on $200bn worth of Chinese imports, including several chemicals and plastics. The increase would happen on Friday, he said. […]
Pressure on US builds as PE exports to China tumble and EU considers tariffs
By John Richardson DONALD TRUMP insisted in early March that he was willing to walk away from a bad trade deal with China. But it now appears that the US is prepared to water down its demands in the interests of getting a deal done. The above chart helps to explain why. The first bar […]
China chemicals storage at bursting point indicates no big new economic stimulus
By John Richardson CHEMICALS markets are a great barometer for weather conditions in the wider economy because they are upstream of so many manufacturing industries. We should therefore take close notice of the above chart, from this excellent article by my ICIS colleague, Yvonne Shi. What the chart shows is that by mid-March, weekly inventory […]
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