By John Richardson IT HAS been evident since as early as February this year that China’s economy is slowing down. But once again, as in 2014, companies and investors have overlooked the key indicator of a slowdown: The sharp decline in credit availability, particularly via China’s shadow banking system. “Not to worry,” I can hear […]
Asian Chemical Connections
Negative Asian polyolefins margins show need for recession planning
ASIAN PE and PP spreads turned negative in October this year for the first time since the same month five years earlier. As spreads turned negative it seems certain that margins would have been in deeper negative territory as spreads don’t account for the full costs of production. Back in October 2014 the sharp fall […]
President Trump’s “very good” call with President Xi: Nothing changes
PRESIDENT TRUMP said yesterday that his discussions with President Xi Jinping were “moving along nicely” following a “very good” telephone call ahead of their critical G20 meeting at the end of November. But on the same day that the US president made his comment, the US Justice Department issued indictments against Chinese and Taiwanese semiconductor companies over […]
Mike Pence’s key China speech highlights Cold War risks for petchems
By John Richardson US VICE president Mike Pence made a barely reported speech on 4 October in which his big theory was that Bill Clinton, George W Bush and Barack Obama misread China. Mr Pence said that the nation they embraced as a partner was instead a competitor. It is important that you read the […]
China polymer growth at risk of 8.6m tonne decline on trade war
By John Richardson THERE is no other country or even region in the world that comes anywhere close to being as important to the global polymers industry as China, as the above chart reminds us. From end-2017 until the end of 2021 in seven of the major synthetic resins – PE, PP, PS, EPS, ABS, […]
US LLDPE exports to Europe to increase by at least 70% in 2019
By John Richardson ON MONDAY I took the percentage shares of total US linear-low density polyethylene (LLDPE) exports in 2017 country by country and on this basis modelled what could happen in 2019. We are next year due to see US PE production jump to 6.5m tonnes from this year’s 5.7m tonnes and 5.1m tonnes […]
US LLDPE needs 68% export growth next year to top five markets…..
…..and that’s assuming there is no trade war with China! By John Richardson THE MORE you dig into the data the more it seems that the US might struggle to find a comfortable home for all of its new polyethylene (PE) production, even without a trade war with China. Using linear low-density PE (LLDPE) as […]
Acrylonitrile butadiene styrene trade war disruptions
By John Richardson BECAUSE CHINA is such a dominant player in finished goods manufacturing, US tariffs on Chinese imports as part of the trade war will have major negative effects upstream across a wide range of petrochemicals and polymers and across a wide range of countries. The reason is of course that petrochemicals are needed […]
US styrene another petchems sector at risk from trade war
By John Richardson THE US decision to pick a fight with China over trade and geopolitical influence could backfire very badly from the perspective of new US investments in petrochemicals capacity – most notably polyethylene (PE) and ethylene glycols (EG). The data tell is that many billions of dollars of investments in new plants will […]
Middle East, India, SEA petchems winners in new trading blocs
By John Richardson JACK MA, the founder of Alibaba, said of the US/China trade war, “It’s going to last a long time, maybe 20 years. It’s going to be a mess. It’s not a trade war, it’s about competition between two countries.” I believe that the world is set to be split into two trading blocs, […]
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