After yesterday’s post, Edwin Pang of Credit Suisse in Hong Kong has raised an interesting question over the likely rationale for China’s massive increase in petchem imports, such as polyethylene (PE), in 2009. As the chart shows, its monthly PE demand (production plus net imports), was very steady in 2007-8. It averaged 980kt in 2007, […]
Chemicals and the Economy
China’s speculative surge slows
Q2 saw an outburst of speculative frenzy all around the world, and in a wide variety of financial markets. China’s Dalian futures market saw LLDPE volume soar to 80 million tonnes – around 4 times total annual world demand. China’s easy money policy meant it was easy to borrow to speculate on a quick recovery. […]
Germany, China, struggle as exports slump
Germany and China have benefited massively from the growth in world trade since 1980. As the Wall Street Journal chart shows, 47% of Germany’s GDP comes from exports. And China has a 37% dependence. US exports are just 13% of GDP, so it is more self-sufficient. Both countries have punched above their weight in terms […]
World Bank sees deeper recession
The chemical industry is always a leading indicator of the global economy. One of the blog’s oldest friends used to be a central banker, and he made no secret of the fact that our discussions about demand levels were often an important factor in his overall analysis. So it is no great surprise that the […]
China aims to reduce imports
China has been a major beneficiary of the globalisation movement in recent years. In turn, it has become a tremendous importer of most chemicals. It accounts for up to 50% of total demand for many Asian chemical producers, and is a critical factor in most supply/demand balances. This position was already changing, however, as China […]
China’s plastic bag ban cuts usage by 66%
A year ago today, China banned the issue of free plastic bags from supermarkets, shops and open markets. And it seems the ban has had considerable success. Supermarkets have used 66% fewer bags, according to government figures. The ban has saved 1.6m tons of oil, whilst also reducing pollution. Although street markets seem to have […]
China and US house prices
The Financial Times today highlights the overwhelming importance of falling US house prices to the outlook for the global economy. It notes that prices are now falling by 2.2%/month, causing a $380bn wealth loss in March alone. It adds that if prices continue to fall at this rate, “the total loss in 2009 would be […]
Hopes of China recovery “premature” – World Bank
The high level of speculation accompanying China’s apparent economic revival worries the World Bank. “Until we see a recovery in private investment, it’s hard to get too excited about the future,” according to David Dollar, the Bank’s country director for China, at a Beijing seminar today. Dollar added that “private investment, the main driver of […]
China’s exports fall 23% in April
China’s exports continue to disappoint. They fell 18% in January and 26% in February. March showed a slightly better performance, with a 17% fall. But April was weak again, with a 23% decline in exports and imports. China’s problem today is based on its past success in becoming the manufacturing capital of the world. Exports […]
Wal-Mart warns of “contracting economy in China”
The Chinese government continues to express firm faith in its economy’s ability to withstand the global economic crisis. And certainly its recent imports of chemicals and polymers have been a lifeline for many companies outside the country. But now Wal-Mart, the world’s largest retailer, has reinforced the blog’s concerns about the economy. Wal-Mart reports that […]
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