Our office in Nanjing has passed along information that should be of concern for any companies sourcing in China. Lead times are increasing for shipments on good local demand and production issues. Also freight pricing has increased sending the cost of landed goods higher. Finally increasing regulatory awareness and the costs associated with filing and keeping records up to date has also pushed prices higher.
Please keep in mind that the Chinese Spring Festival Holiday is Feb 9th to the 15th this year. Shipments from China are often affected for weeks prior to and after this very important holiday.
We suggest filling the pipeline with orders now!
The Chemical Company has operated our Nanjing office for 10 years now. Our pricing and service from China are second to none. If you are currently sourcing in China or considering it please confer with The Chemical Company.
It is no surprise that much of Asia was interested in what might come of China’s Third Plenum, a high level meeting in November among China’s top leadership. First impressions from clients in Asia (as well as our own initial thoughts) was that while plans may sound good, it initially sounded like more of the same rhetoric. That observation may not prove to be entirely true.
It was initially reported that Chinese leaders decided to pursue various financial reforms, including a resolve to have the market “play a decisive role in allocating resources.” In addition there is talk of land reform and expanding urbanization of the society. Presumably this will help to reduce the disparities between rural and urban Chinese, while at the same time encouraging domestic consumption. While this is all interesting, there is little that is new in this discussion. Typical of large bureaucracies, the party statement (as quoted by Reuters) indicated that a team would be “designing reform on an overall basis, arranging and coordinating reform, pushing forward reform as a whole, and supervising the implementation of reform plans” with results expected by 2020. Our client feedback was that it was perhaps just the creation of one more bureaucracy.
There are a number of reforms, which if properly implemented may alter the current landscape. The reform that has been noted very generally, but has garnered a lot of attention, is the reduction of government input regarding resource allocation and letting the market “play the decisive role.” However, on the other side of that discussion, there are reportedly efforts to take on the problems of industrial overcapacity. Requests to acquire land for the production of products when there are already low plant operating rates (such as in the steel industry) would be denied.
We will see how this plays out in the markets, particularly since so much of the current situation in China continues to weigh on the rest of Asia. China walks a fine line between needing strong growth to create jobs, while at the same time trying to control inflation and fence in a speculative real estate sector. While plans may sound good, proper execution is needed to make a difference between achieving the stated goals for 2020 versus the entire effort simply becoming more of the same.
Reprinted with permission from RXN Petrochemical Consulting Inc.
Copyright ©2013 by RXN Petrochemical Consulting Inc. All rights reserved.
For more information please email info@rxnpetrochem.com.
“No amount of experimentation can prove me right; A single experiment can prove me wrong.”
Adipic Acid: 25 Kg., 500 Kg. and 1,000 Kg. Bags (In Stock and Available Now!)
NatureFlexx 509: Phthalate Free General Purpose Plasticizer. Available in Totes (2200 lbs.) and Drums. (In stock and immediately avail.)
Malic Acid: 25 Kg. Bags (In Stock and Available Now!)
Maleic Anhydride: 25 Kg. bags of USA produced briquettes available early 2014.
Bio- Succinic Acid: 2000 lb. supersacks and 25 Kg. Bags Available Now!
Vestinol 9 DINP: TCC offers bulk trucks and split loads (w/ eso or dop) of DINP to North America.
Ammonium Bromide: 25 Kg. Bags in Stock and Immediately Available
Please contact Robb Roach at robb@thechemco.com
or Tel: (401) 423- 3100 for more information.
We appreciate your taking the time to review this newsletter. We welcome your comments as well as contributions regarding our readers’ company/industry activities. Please send them to Robb Roach at Robb@thechemco.com
**Please note that all products are now in Alphabetical Order and many products are hyperlinked to their own information page.**
Benzene: U.S. benzene contracts for December settled up $.385/ gallon to US$4.485/ gallon from US$4.10/ gallon in November. Spot prices are in the $4.76- $4.94/ gallon range. Contract pricing for January is expected to increase some $.30- $.40/ gallon. 
n-Butane: Normal Butane prices are trading in the US$1.30’s per gallon going as low as $1.31/ gallon in December. Pricing has trended lower throughout December and maintained its price below November’s price average of US$1.45 per gallon. 
Ethylene: U.S. Contract Price for November increase $.0125/ lb. to $.4625/ lb. Recent trades are in the mid $.50’s per lb.
Natural Gas: NYMEX NG pricing has steadily moved higher throughout December. Current NYMEX pricing is US$4.43+/- per mmbtu. January NYMEX settled at $4.46/ mmbtu the highest settlement since July 2011. Low inventories due to cold weather is blamed.
Check the real-time commodities tracker at thechemco.com for up to the minute info.
Oil: WTI crude has moved steadily higher in recent weeks to the current US$100.57/ barrel. Demand is good in North America but less demand in Asia is noted.
Check the real-time commodities tracker at thechemco.com for up to the minute info.
Orthoxylene: December contracts settled at US$.60/ lb. a rollover from November. It is speculated that prices will remain flat for January but increase as the driving season approaches. 
Propylene: Contract pricing for December settled at $.705/ lb. for Polymer Grade and $.69/ lb. for Chemical Grade. Up US$.04/ lb. from November.
Acids: Most acids remain relatively balanced. Adipic pricing has moved higher with benzene price increases. Malic and Fumaric remain tight on excellent demand and limited butane based availability. Recent increases in Naptha in China has pushed their production costs higher.
Methanol: MNDRP remains at US$1.90/ gallon for January.
Plasticizers: Increases for branched plasticizers of US$.03 and US$.05/ lb. have been announced for 1/1/14.
Urea/ Ammonia: Ammonia is set to roll over for January at $450/ met ton cfr. Urea pricing has risen steadily to its current US$340/ ton fob. Pricing is expected to continue to rise as we move into high demand season.
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