To begin the week, we highlighted a potential breaking point emerging in the global economy due to the escalating tariff war: Chinese plastics manufacturers—heavily reliant on U.S. petrochemicals—now face production halts as shipments are increasingly being diverted from the world’s second-largest economy.
Bloomberg cites new ship-tracking data showing that a very large gas carrier hauling U.S. propane has diverted from its initial destination in China to a new port of call in Japan.
The data showed that BW Gemini is hauling 46,000 tons of propane from the U.S. The gas tanker left Phillips 66 Freeport LPG Export Terminal in late March and was initially headed for Yantai, China. However, in recent days, while traversing the Pacific Ocean, the port of call was changed to Imari, Japan. […]
Chinese plastics factories that depend on a gas they mainly import from the U.S. are contending with the prospect of widespread shutdowns as the world’s two largest economies bunker down for a prolonged trade warThe note titled “Chinese Plastics Factories Face Mass Closure As US Ethane Supply Evaporates” focused on ethane, a petrochemical feedstock to produce ethylene, one of the most critical building blocks in modern manufacturing.
No worries, Carney will build that pipeline and send his masters the petrochemicals they need. And we’ll get precursor chemicals in return.
The chicoms will descend on Ottawa like locusts … like Basic Dictators … like Fascist State operatives
And once we’ve got precursor chemicals, then we can curse!
Propane and propane accessories? Cue up the King Of The Hill memes, I’ll tell you what!
46000 TONS of propane on board !?
The crew don’t need life vests with balls that big.
President Trump is having a gas rubbing noses in ordure.
Life Follows Art dept.*
Jumping Jack Flash – Rolling Stones – 1968
https://www.youtube.com/watch?v=ruTMp4_sy1E
*Dedicated to Peter Strzok and Lisa Page
Oh noes! How will we live without …… CHINESE PLASTIC! (Democrat talking point soon to emerge)
I guess that ship has sailed…pun intended
https://www2.gov.bc.ca/gov/content/industry/natural-gas-oil/lng/lng-projects
Three export refinery projects that seem to have been in the works for eons, and still aren’t built.
I guess in this case it might be a mixed blessing, depending on how pro ChiCom you are.
Nobody wins a trade war.
The Chinese are returning 737 Max’ to Boeing. They (Boeing) are supposed to deliver 50 this year and at times comprise 25% of Boeings production.
Sure the US can hurt the Chinese but the reverse is also true. Changing supply lines is almost impossible. The sooner everybody comes to their senses the better off we’ll all be.
KKKraper
The same type of BULLSCHITT was whined about when Ronny RayGun started the star war stuff, and yet the USSR collapsed, try keeping up wood joo?
True, except Boeing has an order backlog that will swallow those 50 planes.
Not to worry… A few more states can ban single-use plastic bags (polyethylene), and the demand will go away. (sarc)
Bummer. Now my kids won’t be able to buy toys that leave them in tears shortly after they come out of the package.
Will this affect car manufacturers?
Yes, this would affect car manufacturers — anything that has plastic components really.
China is the largest producer of plastics, largely due to very stupid trade deals have signed with them (yes, I DO include my own country). They are now producing about a third or a little more of the global production. However, their overcapacity has to be taken into consideration here — this is their model; it’s worked well to flood and destroy other countries’ markets/manufacturing bases and to keep Chinese workers employed(and thus not broke and angry) and a way to play funny with their financials. They are now a bit stuck.
Mind you, the plastics are an early stage supply line component — reshore plastics, you can encourage domestic factories that make things out of those plastics; you encourage domestic factories that use those made things in their final product. Cost may be higher due to better worker conditions and safety regulations, but costs are defrayed through shorter (much shorter) supply lines (and you are encouraging domestic transport companies there, so…). Plus there are legal aspects: greater protection for the companies themselves.
The U.S. is currently at about 15% of global production and was estimated to increase to around 20% by 2030. This trade war could become a boon to U.S. plastics manufacturers if they take advantage of it. If you add all of N. America, it becomes even more competitive…but that would only be possible if Canada and Mexico acted as a manufacturing block with another country in N. America against China…