PVC

Home / PVC

Difficult times ahead for US polyethylene exports as business models change

20 November 2017

This wasn’t the chart that companies and investors expected to see when they were busy finalising $bns of investment in new US ethylene and polyethylene (PE) capacity back in 2013-4.  They were working on 3 core assumptions, which they were sure would make these investments vastly profitable: Oil prices would always be above $100/bbl and […]

The post Difficult times ahead for US polyethylene exports as business models change appeared first on Chemicals & The Economy.

Home / PVC

4.5 million tonnes of new US polyethylene exports on front-line as War of Words hits US-China trade

30 March 2017

“There isn’t anybody who knows what is going to happen in the next 12 months. We’ve never been here before. Things are out of control. I have never seen a situation like it.” This comment last month from former UK Finance Minister, Ken Clarke, aptly summarises the uncertainty facing the global economy. As I note in a new analysis, major policy changes are […]

Home / PVC

China’s PVC exports confirm its move to self-sufficiency

10 August 2016

Many commentators were shocked by China’s weak trade data on Monday – with imports falling 12.5% versus July 2015, and January – July imports down 10.5%.  But they were no surprise to anyone focused on developments in the chemical industry, which has once again confirmed its status as the most reliable leading indicator for the […]

Home / PVC

China’s polymer expansions make new US exports hard to place

29 April 2016

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. […]

Home / PVC

45-year shortage of babies hits Europe’s chlorine/PVC demand

20 May 2015

Companies and investors often say “we don’t need to think about demographics – its too far in the future to matter”. This might have been true 20 years ago, but not today.  As European chlorine industry demand confirms, the truth is that “history catches up with us”. The reason is simple.  Europe stopped having enough […]

Home / PVC

China becomes net exporter of PVC as property bubble bursts

11 March 2015

China’s property bubble is collapsing, with average house prices now down 10% from their peak.  As agents Knight Frank note, “The developers have two to five years of stock to clear. So until that has been cleared, prices aren’t going up any time soon” We are also seeing more bankruptcies amongst property developers.  These began a […]

Home / PVC

Deflation gains: China’s plastics market sees over-capacity

11 February 2015

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 […]

Home / PVC

The China middle class myth moves us closer to protectionism

12 December 2014

Believing conventional wisdom can destroy your profits.  One example is playing out in the oil market before our eyes. Another example is the myth that China was about to become middle class.  Yet income levels always made this impossible: More than 9 out of 10 Chinese earn less than $20/day By comparison, the basic state pension in the UK is 25% higher, at over […]

Home / PVC

China becomes major PVC, PTA exporter for first time in history

28 October 2014

Be very careful what you wish for.  That is the key message coming out of close analysis of China’s latest trade data. Recent media reports were upbeat at news that China’s exports had increased, as it appeared to suggest Western demand was returning.  But it seems nothing could be further from the truth. One major concern is that part […]

Home / PVC

Turkish plastics markets see imports fall for first time since 2008

7 October 2014

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 […]

Home / PVC

US PVC exports tumble as demand weakens in key markets

16 September 2014

The US PVC industry is hitting new problems, to add to the post-2006 collapse of the US housing market. Yet only 10 years ago, it was riding high.  Demand into housing (the main outlet) was at record levels thanks to subprime lending, and PVC production had just hit a record 7.3 million tonnes. Even after the financial Crisis, global […]

Home / PVC

US fracking demand creates price volatility for hydrochloric acid

20 August 2014

Fracking has completely changed the outlook for US natural gas supplies, as the above chart from the latest Energy Information Agency 2014 annual report shows: It forecasts a 56% increase in total natural gas production from 2012 to 2040 This is largely due to growth in shale gas (green) and tight gas (brown) Shale gas output […]

Home / PVC

ExxonMobil Antwerp to spend $1bn boosting diesel capacity

14 July 2014

When the world changes, companies either change with it or go out of business.  The market for stagecoaches was never the same once cars came along.  And not many students use slide rules today, now calculators are available. Usually, of course, these market changes are slow-moving.  So companies often fail to respond in the hope the old world […]

Home / PVC

China’s PTA, PVC exports jump as it moves to preserve jobs

26 May 2014

To assume, as they say is “to make an ass out of u and me”.  That was certainly the case last week, when financial markets assumed that China’s slightly better PMI index was a sign that its domestic economy was stabilising.  They had temporarily forgotten the key message of February’s Research Note, namely that the government would aim to […]

Home / PVC

US PVC exports fail to grow in 2013, despite shale gas boost

25 February 2014

Trade data for net US PVC exports seems to be trying to tell us something very important about the current state of the global economy.  As the chart shows, based on data from Global Trade Information Services: Net exports failed to grow in 2013 (red column) versus 2012 (black) and were only up 2% versus 2011 […]

Home / PVC

US polyethylene and PVC exporters focus on margin, not volume

2 December 2013

2013 has seen 3 types of markets develop for the blog’s IeC Downturn Monitor portfolio as the chart above shows: Financial assets such as the S&P 500 (purple) have soared, as did the US$ against the yen (orange) Crude oil (blue) and naphtha (black) tried to follow, but found it difficult to pass though the higher prices Benzene (green) and […]

Home / PVC

EU, US caustic soda output slows as China’s exports rise

28 November 2013

Chlorine and caustic soda are some of the most widely used chemicals.  Thus their performance is always a valuable leading indicator for the wider chemical industry and the economy itself.  So the chart above, based on Eurochlor data,  is a worrying sign: Chlorine production is down by 1.9% in 2013, after a 2.9% fall in 2012 Caustic […]

Home / PVC

Asian ethylene margins soar on China stimulus, plant outages

13 November 2013

Volatility is one of the blog’s key themes for the next few years, as the world transitions to slower growth and a more regional economy.  And the chart above from the latest ICIS pricing Asian ethylene margin report highlights this new trend very well: Margins jumped 42% last week to reach $290/t, based on naphtha […]

Home / PVC

China’s PVC demand confirms need for economic policy changes

7 November 2013

China’s new leadership have a double task as they head into Saturday’s critical economic plenum, which will decide policy for the next 10 years.  On the one hand they have to avoid the appearance of crisis, and ‘keep the show on the road’.  It would be fatal to allow their agenda to be hijacked by […]

Home / PVC

Turkey an export battleground for PVC as China slows

9 October 2013

Turkey has always been one of the blog’s favourite markets, when it wants to understand what is happening to supply/demand balances.  The reason is that Turkey has a very successful downstream industry, but has failed to invest in upstream capacity.  …

Home / PVC

US PVC exports see only modest growth despite shale gas advantage

20 August 2013

The casual observer might be forgiven for imagining that the US ethylene industry should be seeing its biggest export boom of recent decades.  Its ethane feedstock cost is back at its normal 25c-30c/gal range of a decade ago, whilst its …

Home / PVC

US housing starts stumble as rental demand weakens

25 July 2013

US housing is core to the US economy.  And as the US economy is 22% of the global economy, developments in housing matter to all of us. We learnt this during the subprime Crisis, when the blog’s warnings that the supposed boom was an illusion were ignored until too late.  Now the same problem is developing again.  Thus […]

Home / PVC

US PVC exports stall, despite shale gas cost advantage

25 June 2013

You can lead a horse to water, but you can’t make her drink. That seems to be the critical message from the current state of US PVC export demand. This should be booming, based on the cost advantage provided by …

Home / PVC

European cracker operating rates drop below 80%

29 May 2013

Q1 was another miserable quarter for EU olefin producers. As the chart shows, based on APPE data, ethylene production at 4.7MT was at the lowest level in the past 10 years, with the exception of 2009. In fact, one has to go back to 1997 to find a low…

Home / PVC

EU chloralkali markets weaken in H2

17 January 2013

Chlorine and caustic soda production are a key indicator of economic growth. They have been produced in large volumes for over a century, and have a extremely wide range of uses from pharmaceutical and aluminium production to detergents and disinfecti…

Home / PVC

EU faces US competition in PVC export markets

26 April 2012

The blog continues this week’s special series on chloralkali and PVC markets by looking at EU developments on PVC.

Historically the EU has had strong export positions into markets such as Turkey and Russia, which lack major local production. More rec…

Home / PVC

Shale gas supports US PVC exports

25 April 2012

Yesterday the blog discussed caustic soda, and the recent importance of China’s metal demand. Today it focuses on chlorine and PVC.

PVC is the largest end-use for chlorine. It is also critical for chloralkali producers when caustic demand is strong,…

Home / PVC

Russia’s chemical production continues to grow

9 February 2012

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…