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The chemical industry is the best leading indicator for the global economy. And my visit to Singapore last week confirmed that the downturn underway in the Asian market creates major risks for developed and emerging economies alike. The problem is focused on China’s likely move into recession, now its stimulus policies are finally being unwound.
Asian downturn worsens, bringing global recession nearer Read More
China is no longer seeking ‘growth at any cost’, with global implications, as I describe in my latest post for the Financial Times, published on the BeyondBrics blog A pedestrian covers up against pollution in Beijing © Bloomberg China’s President Xi Jinping faced two existential threats to Communist party rule when he took office 5 […]
The post Anti-pollution drive hits China’s role as global growth engine appeared first on Chemicals & The Economy.
Anti-pollution drive hits China’s role as global growth engine Read More
China’s strategies for oil, refining and petrochemical production are very different from those in the West, as analysis of Sinopec’s Annual and 20-F Reports confirms. As the above chart shows, it doesn’t aim to maximise profit: □ Since 1998, it has spent $45bn on capex in the refining sector, and $38bn in the chemicals sector □ […]
Sinopec’s results confirm China’s focus on employment and self-sufficiency, not profit Read More
It could be a very difficult H2 for anyone involved in the Asian oil and polymer markets. And given the global importance of these markets, everyone around the world will also feel the impact. The issue is that most business strategies have been based on 2 increasingly unlikely assumptions: Companies all assumed that oil […]
Difficult times lie ahead for global polymer markets, as I note in a new analysis for ICIS Chemical Business. In the short-term it is clear that downstream users have, once again, been busy building stock in recent weeks as the oil price rose. But now, finance directors are getting calls from their bankers asking about […]
US polypropylene imports rise as China aims for self-sufficiency Read More
Difficult times lie ahead for global polymer markets. It would be bad enough that downstream users have been busy building stock in recent weeks as the oil price rose, as Linda Naylor reports on polypropylene (PP) for ICIS: “PP demand is slow, slower than many expected, and the strong growth of recent months is now […]
Clouds gather over global polymer markets as China imports drop Read More
China used to be the manufacturing capital of the world. It would buy raw materials, and sell finished products to the West. But these volumes are now in decline. The West’s ageing populations already own most of what they need, and their incomes are reducing as they enter retirement. So China’s business model is changing. […]
China’s polymer expansions make new US exports hard to place Read More
“The reality is the US from a chemical standpoint is a very mature market. We have some demand growth domestically in the US but it’s a % or two – it’s not strong demand growth,” Pryor said, adding that polyethylene hardly grew in the US in a decade. “That is not going to change. “The […]
US ethylene output rise warns of market share battles ahead Read More
Everyone wants to assume that markets will soon be back to “normal”. Consensus thinking now accepts that China will be a bit slower than before – but it argues that 6.5% GDP growth is still pretty good, even if it isn’t double digit. And it suggests that persistence, and “staying the course” is vital for […]
Propylene price collapse highlights New Normal world Read More
Everyone is now beginning to notice the change in economic policy in China. And concern is rising about the outlook for all those new petchem investments about to come online, whose rationale has been the need to supply ever-increasing growth in Chinese demand. The chart above highlights the reality behind this wishful thinking: Everyone “knew” […]
China’s PP production rises 25% as it moves into higher-value export markets Read More
Polypropylene (PP) is one of the world’s major plastics – used in areas as diverse as car bumpers and food packaging. And in recent years, consumption has soared due to China’s seemingly insatiable demand, as it became the manufacturing capital of the world. But now, all that is changing. As we warned in chapter 2 of ‘Boom, Gloom […]
Polypropylene highlights impact of China’s new economic direction Read More
More and more commentators are beginning to recognise that deflation is becoming inevitable in many major economies: China’s producer prices fell -4.3% last month, and its consumer prices rose just 0.8% Eurozone consumer prices fell in December to -0.2%, and are likely to have fallen further in January US prices rose just 0.8% in December and are […]
Deflation gains: China’s plastics market sees over-capacity Read More
Turkey is the blog’s “go-to” market when it wants to confirm trends in global markets. The reason is that Turkey has a very successful downstream industry, but has failed to invest in upstream capacity. This means it is essentially an opportunistic market from a sellers’ viewpoint. During good times, exporters will only divert product from […]
Turkish plastics markets see imports fall for first time since 2008 Read More
Russia has been the great exception in regional chemical markets.
Normally, production growth starts at a high level, often 15% a year or more, and then slows as markets become more mature. But in Russia, output collapsed with the Berlin Wall after…