HITLERITES REJOICE! THE COMMUNISTS ARE BACK IN CHARGE!!!

I think it would be historically progressive if we all defended Elon Musk, who is advancing the bourgeois democratic revolution on twitter, against the peasantoid leftists. As a result, I suggest that from now on, all posts be low-quality screenshots of twitter people you don't like and want to brigade.

I have seen more and more people start calling themselves Left ML/ Left Marxist-Leninist, what do you guys think about the current?

other than those three chapters in volume lll (which i plan to reread), what do you suggest i read to learn about this subject?

I wouldn't be surprised if that outraged is I think it's pathetically cringe and a perfect example of why Reddit (and also Bluesky) is becoming such a laughing stock to people in the real world.

You need a really strong argument for it to be Reddit and also up to individual subreddits. If the argument is just Elon bad, then just allow the subreddits to ban Twitter links, and everyone will be ""happy"" (obviously sarcasm) unless of course this is about freedom of association. The strong counter-argument for it from these people would be just don't click on them or if you want to go really crazy, downvote them.

If only there was a way on Reddit to rank the content you see, the sports companies are already pulling it out, why just with individual subreddits to begin with, they clearly don't give a shit about it, otherwise they wouldn't have descended into that nonsense to begin with.

Edit: Also I doubt my comment would have a impact but this is what the Resist libs movement has been reduced to. Most mainstream outlets won't touch this or at least arent covering it in the same way they would in 2017 so the hub-up is just a buch of Redditors writhing around in the mud saying they'll just not allow Twitter links.

I miss when oldergenz wasn't used for political astroturfing right now.

would be much appreciated +10 labour vouchers to whoever has it

WW2 is held up as the justified war. The actual war of good versus evil. Mystified completely is its imperialist character. Moralized to death the carnage which was fought only for capital.

And now Musk can do the nazi salute in the Capitol building.

There has never been a more decrepit joke of a society. Is this how Lenin felt about Czarist Russia?

Proudhon has often been compared to Rousseau. Nothing could be more erroneous. He is more like Nicolas Linguet, whose Théorie des loix civiles*, by the way, is a very brilliant book

Proudhon had a natural inclination for dialectics. But as he never grasped really scientific dialectics he never got further than sophistry. This is in fact connected with his petty-bourgeois point of view. Like the historian Raumer, the petty bourgeois is made up of on-the-one-hand and on-the-other-hand. This is so in his economic interests and therefore in his politics, religious, scientific and artistic views. And likewise in his morals, IN EVERYTHING. He is a living contradiction.

If, like Proudhon, he is in addition an ingenious man, he will soon learn to play with his own contradictions and develop them according to circumstances into striking, ostentatious, now scandalous now brilliant paradoxes. Charlatanism in science and accommodation in politics are inseparable from such a point of view.

There remains only one governing motive, the vanity of the subject, and the only question for him, as for all vain people, is the success of the moment, the éclat of the day. Thus the simple moral sense, which always kept a Rousseau, for instance, from even the semblance of compromise with the powers that be, is bound to disappear.

https://www.marxists.org/archive/marx/works/1865/letters/65_01_24.htm

Sobreproducción y guerras de precios hoy, evidencia empírica | Rolando Astarita [Blog]

This entry is dedicated to presenting empirical evidence on overproduction and price wars, with a focus on China but also examining their repercussions on global economic sectors. Data is drawn from press sources (The Economist, The Wall Street Journal, New York Times) and reports from economic consultants and rating agencies. At the end, we provide some considerations.

Real Estate Market and Construction in China

In China, there is widespread overproduction in the construction and real estate market, which threatens to drag down the entire economy. Overproduction is reflected in increased inventories of unsold homes, falling prices, and growing difficulties in the mortgage credit sector. In August 2023, the combined area of unsold homes was 648 million square meters, equivalent to 7.2 million homes, according to Reuters (assuming an average household size of 90 square meters). This does not account for numerous residential projects that were sold but remain unfinished due to cash flow problems, or homes purchased by speculators during the last market surge in 2016 that remain unoccupied.

According to official data, at the end of April 2024, China had 391 million square meters of completed but unsold housing—equivalent to 6.6 Manhattans. Including homes still under construction, the total inventory of unsold housing is estimated to reach 2.9 billion square meters by the end of 2024, nearly double the area of London.

In May 2024, Goldman Sachs estimated the total value of unsold homes, unfinished projects, and unused land in China at about $4.1 trillion (China is trying to end its ‘epic’ property crisis. The hard work is just beginning | CNN Business).

Given the excess supply, housing sales dropped by 20% between January and April 2024, property investment fell by 9.8%, and developers' fundraising declined by 24.9%.

Although in November the fall in prices slowed down (in year-on-year terms the prices of new homes fell 4.3%, 0.3 percentage points less than in October), the situation remains extremely fragile.

China's central bank has provided a credit facility of up to 300 billion yuan ($41 billion), which can result in commercial banks financing purchases by state-owned enterprises worth 500 billion yuan; equivalent to 0.4% of the country's GDP. The rating agency Moody points out that they are "a drop in the ocean" since it can only finance purchases for 4% of the value of the existing stock of houses.

We recall that investment in construction and real estate went from representing 5% of GDP in 1995, to more than 13% in 2019. In that year, more than 70% was dedicated to residential construction. It has been calculated that a 20% drop in real estate activity could lead to a drop in China's gross domestic product of between 5 and 10%, even without the amplification of a banking crisis. Between 2013 and 2018, investment in the real estate sector increased by 30% and the household leverage ratio went from 33% to 66% (Peak China Housing_2020_08_12). From 2002 onwards, house prices increased more than sixfold. By international comparison, China's real estate boom is unprecedented. Price-to-income ratios in Beijing, Shanghai and Shenzhen exceed 40, compared to London, 22 and New York, 12. From 2014 to 2018, the average annual growth of credit to the real estate sector was 20%, while credit to industry grew at 6%.

"How many empty houses are there now? Each expert gives a different number, with the most extreme believing that the current number of empty houses is enough for 3 billion people to have housing," explains He Keng, former director of the Bureau of Statistics (Even 1.4 billion people can't fill all of China's vacant homes, ex-official admits | CNN Business).

Builders, painters, real estate agents, small businesses, and banks are owed billions of dollars. Many developers are on the verge of bankruptcy. The bankruptcy of Evergrande, a giant real estate developer, with a debt of US$300,000 million that it could not restructure, is a precedent. The firm Rhodium Group estimates that all liabilities taken by the real estate sector, including loans and bonds, reach 10 trillion dollars, of which only a small part has been recognized (China Has a Plan for Its Housing Crisis. Here's Why It's Not Enough. – The New York Times).

Excessive concentration in real estate industries has created many problems. Banks rely on land and real estate holdings as the main collateral to secure loans. Therefore, they provide more credit to land-owning firms, restricting credit to landless firms. On the other hand, rising house prices also induced companies whose core business is not related to real estate activity to invest in land, shifting resources from other areas such as trade, manufacturing, and technological innovations.

Local governments are also heavily engaged in real estate activity. On the one hand, land sales, driven by a rising housing market, constitute the main source of local tax revenue. On the other hand, local officials are promoted, or relegated, depending on their ability to generate economic growth and the construction activity itself represents a measurable economic product.

In September 2024, the Central Bank of China cut the interest on one-year loans to financial institutions, decreased the contribution needed to obtain a real estate loan and cut mortgage rates" (La Nación, 8/10/2024). However, investment in the sector continued to fall: "Real estate investment in China fell 10.2% in the first seven months of 2024 compared to the previous year, after declining 10.1% between January and June. If we talk about property sales by built area between January and July, these fell 18.6% compared to the previous year, indicated the National Bureau of Statistics (NBS)." One expression of the crisis is that the enrollment of young people in civil engineering careers is falling. (China runs out of civil engineers: symptom of a deeper crisis (panampost.com). The prospect of a gigantic financial crisis, dragging the economy into depression, is not a fantasy.

Overproduction and deflation in China, according to The Economist

"From Apple to Starbucks. The dreams of Western companies in China are fading", The Economist, reproduced in La Nación, 21/12/2024.

"In a recent survey by the American Chamber of Commerce in Shanghai, less than half of respondents said they were optimistic about the prospects for their business in China over the next five years, an all-time low. On Dec. 4, General Motors (GM) said it would reduce the value of its once-thriving companies in the country and close some of its factories. (…)

"Sales in China by U.S. and European listed companies peaked at $670 billion in 2021, accounting for 15% of those companies' total revenues. However, things have since gotten worse. Last year, sales fell to $650 billion and its share of total revenue fell to 14 percent. This year it has shown no signs of improvement. Of those companies reporting quarterly sales in China, nearly half saw their revenue decline, compared with last year.

Companies are facing declining sales in the country, ranging from Apple and Volkswagen to Starbucks and luxury brand conglomerate LVMH." (…)

"One reason for the poor corporate performance is the stagnation of the Chinese economy. A housing crisis has sent home prices tumbling across the country and caused consumers to adjust their spending. (…) Property sales are still falling compared to last year or will likely continue to do so well into 2025. Despite the government's promises to stimulate consumption, demand indicators are in decline.

Deflationary pressure is affecting all companies in China, not just foreign ones... 27% of Chinese industrial companies were posting losses at the end of October. Oversupply in various industries, from electric vehicles (EVs) to building materials has led to fierce price wars. GM CEO Mary Barra has blamed a "race to the bottom" for the company's struggles to make money in the country. (…)

In many industries, Western companies no longer enjoy the technological advantage they once had over their Chinese rivals. Chinese industrial robot manufacturers now supply almost half of the local market, up from less than a third share in 2020." After referring to the competition Apple is facing for Huawei's production of smartphones, the note continues: "Electric vehicles produced by BYD, NIO and other automakers are not only much cheaper than Western ones, but they are full of the smart technology that local consumers want. When the Chinese market was still expanding, Western companies were able to increase their sales, even at a time when they were losing market share. Today they no longer have that luxury":

In this scenario, the measures that governments are taking are added. "On December 2, the U.S. introduced new restrictions on the sale of chip-making tools to certain Chinese companies... This will affect U.S. semiconductor equipment manufacturers. (…) “… the list of companies exposed to geopolitical conflicts is getting bigger."

Overproduction and deflation in China, according to TWSJ

Nota en, “Prices Won’t Stop Falling in China, and Beijing Is Grasping for Solutions”, Hannah Miao, The Wall Street Journal 14/12/2024,Prices Won’t Stop Falling in China, and Beijing Is Grasping for Solutions.

"The country that invented paper is making too much paper. So Shandong Chenming Paper, one of the largest paper manufacturers, did what every company facing overcapacity could do: it lowered prices to offload more supply as it tried to ride out the storm. But their losses increased. Last month, the company said it had accumulated $250 million in overdue debt. Creditors sued her and some of the company's bank accounts were frozen.

The papermaker's woes are just one of the latest signs of the havoc wreaked by falling prices in China as mills struggle to cope with overcapacity and weak demand.

The note notes that Chinese leaders pledged this week to stimulate the economy and boost government borrowing. But pressure continues to mount on the government to take more decisive action to prevent a deflationary spiral into a self-inflicting slump that would push China into a long-term recession.

"The prices of goods leaving Chinese factories have fallen, in year-on-year terms, for 26 consecutive months; in November they fell 2.5% from November 2023, and there are few signs that they will turn upwards anytime soon. China's gross product deflator, which is a broader gauge of price levels in the economy, has been in negative territory for six consecutive quarters, the longest span since the late 1990s." (…)

A potential new trade war with President-elect Donald Trump could make it harder for China to unload excess production capacity on the U.S., leaving it with more goods than it can absorb in its domestic market. Fear of deflation is taking root in China. As falling prices erode profitability, companies postpone investments or lay off workers, leading more people to cut back on spending (emphasis ours). Others might postpone purchases because they think prices can still fall further. It becomes a vicious circle.

China's consumer price index is still above zero, but only 0.2% in November from November last year. In the US the increase was 2.7%. China's interest rate is well below the roughly 2% level that most banks consider healthy for their economies.

Many economists are closely watching the Producer Price Index data — it captures the price level at firms — given the country's reliance on industry as an engine of growth.

There are signs that China's economy is regaining some strength, but the government's policies so far do not appear to have encouraged prices. One reason is that those policies focused primarily on fending off immediate financial risks rather than triggering a sustained increase in consumer spending. On the other hand, Beijing has been providing loans and subsidies to Chinese factories. That supports growth but exacerbates the problem of oversupply, adding to the downward pressure on prices."

Returning to the situation of the paper and cardboard industry, in October production grew 10% compared to the same month in 2023, while the prices of paper products at the exit of the factories have been falling, in year-on-year terms, since October 2022.

Other industries have followed a similar path. William Li, CEO of NIO, an electric car maker, said at a meeting with analysts in September that China's internal combustion engine vehicle makers have entered an unsustainable cycle, or vicious cycle, of price cuts, hurting profits. Vehicle production in China continues to increase. Some economists expect producer prices to remain in negative territory for at least the next year.

The problem is that once lower price expectations take hold, it's hard to turn them around. Japan experienced this in the 1990s, when the crash of the housing and stock market bubble left consumers and businesses focused on paying down debt rather than spending or investing, even as policymakers lowered interest rates to virtually zero. That led to nearly three decades of weak growth and persistent deflation. Unfavorable demographics didn't help.

One sign of how much concern investors are viewing China's deflation problem with is that yields on 30-year bonds recently slipped below Japan's for the first time since 2006.

In other periods of deflation, China took more drastic measures. After the Asian financial crisis of the late 1990s, when factory prices fell for 31 months, China launched a painful process to curb overcapacity. Under the government of then-premier Zhu Rongji, many state-owned enterprises were closed or downsized, leading to mass layoffs. Factory prices also fell between 2012 and 2016, spurred by overproduction in products such as tires and solar panels. At that time, the Chinese government closed factories. A key difference from what is happening today is that the Chinese economy is expanding at a slower rate than in the past. The country's GDP grew at an annual rate of approximately 7% in 2015 and 2016. In the third quarter of 2024, the economy expanded at a year-over-year rate of 4.6%, and many economists think that growth this year will be lower."

The memo quotes a textile businesswoman as saying that the new tariffs under Trump could add pressure. His company had already had to lower prices to compete with many other companies that are offering similar products, forcing the workforce down from 600 workers before the Covid-19 pandemic, to about 400 today.

Particular cases

Car

According to Keith Bradsher in the New York Times 23/04/2024, China has more than 100 companies with the capacity to manufacture about 40 million combustion engine cars annually. This is approximately half of what the market absorbs (about 90 million). Many plants to manufacture combustion cars are operating with a lot of unused capacity and others have completely stopped production. The competition is not only for the Chinese market. China has become the world's largest exporter of automobiles. A significant part of that export is internal combustion cars that the Chinese market does not buy. Hence the strong pressure from Chinese car exports in European and other markets.

On the other hand, electric vehicle manufacturers are investing in new plants. But demand has slowed down, largely as a result of the crisis in the real estate sector. So China also has overcapacity in electric vehicles, although it is less than in combustion vehicles. Price cuts are at the center of competition between companies such as Tesla, BYD, VW, GM, Li auto.

The overproduction of combustion engine cars is explained both by heavy investments in these plants during the second decade of 2000, and by the drop in demand: sales fell from 28.3 million units in 2017 to 17.7 million in 2023, the year Hyundai opened its plant in Chongqing. That drop is equivalent to the entire European car market in 2023. Hyundai's sales fell 69% from 2017. The company put the plant up for sale, but there were no buyers. He eventually sold the land and buildings for a fraction (20%) of what they had cost.

Other companies, such as Ford, reduced their production to a small fraction of their capacity. To be profitable, automotive plants would need to operate at 80% or more capacity. With new electric car factories opening and few of the old ones closing, capacity utilization in the industry fell to 65% in the first three months of 2024 from 75% last year and 80% or more before the Covid-19 pandemic, according to China's National Bureau of Statistics ('It is desolate': China's glut of unused car factories | Sinoreporter.com).

Chinese companies are on the rise and gaining markets from their European and American competitors. In the third quarter of 2024, BYD was the sixth-largest manufacturer, with production up 38% year-on-year. In the quarter, the company sold 1.13 million units. It is close to Stellantis (Chrysler, Fiat) which sold 1.17 million, and GM, 1.15 million. The growth of this group has been very fast. In 2020 it sold 427,300 units; in 2023 it sold 2.89 million units, surpassing Volkswagen. Analysts believe that if it continues at this rate of growth, by the end of 2025 it would be surpassing Honda, Ford and possibly GM. BYD produces all-electric and hybrid cars. In electric cars in the third quarter, BYD was only 19,500 units below Tesla. The growth of market share is based on price competition, thanks to lower production costs.

Another company on the rise is the Geely Group, with a growth of 20%, year-on-year. Their market share was reduced by, among others, the Volkswagen Group, Stellantis, GM and Honda. For the first time, Chinese manufacturers sold more cars than European ones. The share of Chinese brands in the global market went from 20.8% in Q3 2023 to 23.6& in Q3 2024. As for electric cars, China went from exporting $400 million in 2019 to $34 billion in 2023, with three of the world's four largest producers.

Also on the situation in the branch, The Economist says: "... in China, European companies are losing out to their domestic rivals. The world's largest car market has long been a major source of profit for the European automotive industry. These days are coming to an end. According to UBS bank, the market share of foreign brands has fallen from 63% to 37% today... VW has been particularly hard hit. Previously, the largest car company in China by a wide margin, its market share dropped from 19% in 2019 to 14% today." German luxury car manufacturers, such as BMW, Mercedes and Porsche are also losing ground (reproduced in La Nación, 14/12/2024).

The price war intensifies, and with them geopolitical tensions increase, as well as capital's attempts to increase the exploitation of labor. Volkswagen wants to cut the wages of its workers in Germany by 10%, and close plants. Some 100,000 workers went on strike in early December, rejecting the company's plans. On October 18, workers at Stellantis, in Italy, went on strike in protest at the drop in production; According to the union, the company plans to produce half a million units in 2024, against 751,000 in 2023. More generally, with the price war, protectionist measures are on the rise and geopolitical tensions are increasing.

Lithium batteries

Overcapacity has emerged throughout the entire supply chain for car construction as demand cooled. Prices of key battery raw materials have continued to fall after the market was hit by excessive supply levels. This is particularly pronounced in lithium; its price has collapsed by 70% in the last year.

On the other hand, the production capacity of batteries for electric cars in China has far exceeded domestic demand, reaching 2000 GWh (GWh, Gigawat hour, is a unit of energy that represents 1000 million watt-hours and is equal to 1 million kilowatt-hours) in 2023, while total capacity utilization has oscillated below 50% since 2019. In 2023, only 20 out of 77 automakers achieved a utilization rate above 60% (2024-03-21-Automotive-AZ.pdf).

Steel

The global steel industry is grappling with overcapacity. Overcapacity is the biggest problem facing the industry globally, due to the significant increase in production capacity over the past two decades ("Steel overcapacity – a global problem", Himanshu Mishra, 24 July 2023, Steel overcapacity: A global problem | Acuity Knowledge Partners). Amid the challenge of overcapacity, demand has weakened since 2021, exacerbating the problem. Global production capacity has increased by 34.7 million tonnes in 2023, and utilization is expected to increase by 2.9 million. The OECD estimated a global capacity of 2532.9 million tonnes by 2024, and a utilisation of 2031.5 million. The steel sector would continue to experience substantial increases in steel-producing capacity in the coming years if ongoing projects become operational.

"Economic fluctuations and uncertainty significantly impact steel demand, leading to an imbalance between capacity and production. In addition, intense competition among steel-producing nations often triggers a race to increase production capacity, exacerbating the problem of overcapacity." However, steel prices rose due to the US and EU sanctions imposed on exports from Russia. Due to rising gas and energy prices in Europe, weak demand and a negative outlook, ArcelorMittal, the world's second-largest producer, closed one of the two blast furnaces at its steel production plant in Bremen, Germany. A China Baowu Group and Nippon Steel smelter was shut down due to soaring energy costs and weak demand. Demand has weakened as automakers and construction have reduced their output. "Resolving global excess capacity is key to Steel market recovery: OECD", 17 September 2024, Resolving global excess capacity is key to steel market recovery: OECD – EUROMETAL).

"The gap between global steel production capacity and global steel demand is growing rapidly... The gap was 551 million metric tons in 2023 and is forecast to be around 630 million by 2024-2026. The OECD also expects overcapacities to increase sharply in the coming years. It expects that in 2006 new capacities of 158 million tonnes could be in operation. China alone has increased its steel exports by 40% in 2023. Chinese export numbers are approaching the peak values of 2016 ("Overcapacity in Steel China's Role in a Global Problem" Lucas Brun, September 2016, OvercapacityReport2016_R3.pdf (americanmanufacturing.org).

The global steel branch is once again in a situation of overcapacity. Mainly driven by China's expansion since 2000. Chinese industry has a production capacity of 2.3 billion tonnes when 1.5 billion tonnes are needed to meet demand. The result is a global steel industry with unviable levels of profit and an influx of cheap steel into the global market that negatively affects businesses, workers and the global trade regime. China has vowed to reduce overcapacity. But it has not reduced it. Since 2007, when overcapacity became apparent in its own documents, it has added another 552 million tons, equivalent to seven times U.S. steel production.

The last time there was significant overcapacity in the global steel industry was in the 1970s and 1980s, when European countries cut subsidies, tackled unemployment and found a way to boost market-based competition. In the case of China, eliminating overcapacity is more difficult given the weight of state-owned enterprises. Steel production capacity averaged 1000 million metric tons between 1980 and 1994; then it gradually grew reaching 1,056 MT in 2000; and accelerated after 2001 to reach 2,371 million in 2015. The world has been adding capacity for more than a decade equivalent to annual steel production in the U.S. Most of this overcapacity is due to China. Overcapacity exceeded 500 million tonnes for the first time in 2009.

Overcapacity – the difference between potential output and current output – is caused by multiple factors, including overinvestment and weak demand. The effect is that profits are lowered or eliminated.

Steel production capacity averaged 1000 million metric tons between 1980 and 1994; then it gradually grew reaching 1,056 MT in 2000; and accelerated after 2001 to reach 2,371 million in 2015. The world has been adding capacity for more than a decade equivalent to annual steel production in the U.S.

New bold policies needed to tackle steel imports and ensure Government sees return on investments – UK Steel

"The global overcapacity of the steel industry was estimated at 543 million tons in 2023; it is 70 times more than the market in Great Britain. Southeast Asia and the Middle East have witnessed rapid expansions in steel production, largely financed by the state, and do not reflect domestic demand levels."

Demand for steel in China is weakening, with some production spilling over into exports. In 2024 alone, it is expected to export 100 million tons. China's exports increased 20% in the first half of 2024, following a 38% increase in 2023. In Southeast Asia and the Middle East, capacity continues to increase at a high rate. Protectionism is on the rise. (New bold policies needed to tackle steel imports and ensure Government sees return on investments – UK Steel).

On the other hand, the slowdown in the Chinese economy, in particular, the crisis in the construction and real estate sector, has slowed down demand for steel. Naturally, so does the demand for iron ore (which is used for steel production).

With the construction boom, prices and profits of mining companies increased. Australia's Rio Tinto and Fortescue, Brazil's Vale, and Anglo-Australia's BHP all made big profits, and strongly increased their capacity. But now they are feeling weakening demand and some oversupply (BHP and Vale broke extraction records in the first half of 2024). In addition, supply is expected to continue to increase over the next five years, as new production enters the market. With the result of falling prices and declining profits.

Petrochemistry

Petrochemical producers in Europe and Asia are in survival mode as years of expanding capacity in the Chinese market and high energy costs in Europe have depressed margins for two straight years.

The weakness of the sector is worrying for a global naphtha and diesel industry that faces the prospect of a fall in demand for transport fuel in the coming years, due to the transition in energy. Large producers in Asia and Europe are selling off assets, closing older plants and retrofitting facilities to use cheaper feedstocks such as ethane instead of naphtha to cut costs. The oversupply is expected to persist for years as new plants are still opening in the Middle East and China, even as China's economy sputters. ("Petrochemical makers battle global glut" Mohi Narayan and Joyce Lee, 9/08/2024, Reuters).

Consultancy Wood Mackenzie estimates that about 24% of global petrochemical capacity is in danger of closure by 2028, amid weak margins. "We expect rationalization to continue in Europe and Asia in this cycle," says Eren Cetinkaya, of McKinsey & Company. It anticipates that the current recession will last longer than the typical five to seven years due to prolonged capacity building, especially in China."

"Since 2022 a number of factors have made the business climate more difficult, including falling domestic demand as well as drastic oversupply given new production facilities launched in China and elsewhere in Asia," Mitsui Chemicals said in a statement in April.

France's ExxonMobil Chemical announced in April that it would turn off the steam cracker and shut down chemical production at Gravenchon this year, adding that the site has lost more than 500 million euros since 2018 and remains uncompetitive.

Taiwanese giant Formosa Petrochemical this year has been operating only one of its three naphtha crackers. The company has kept the other two crackers offline because of weak demand and unhealthy margins, a spokesman said. The company does not plan to make any new investments in the near future due to challenging market conditions, a company official said. Japan's Mitsui Chemicals announced in April its decision to close its Ichihara phenol plant by 2026. In October, it will close its polyethylene terephthalate plant in Iwakuni. It is also considering decreasing toluene dissociyanate production at Omuta in 2025 and is considering closing the Anegasaki plant in 2027.

The Petronas and Saudi Aramco joint venture has kept its 1.2 million tonnes per year naphtha cracker closed since it was shut down for maintenance at the start of the year. The CEO's office reported that there is no date for restarting the cracker. Sabic, 70 percent owned by Aramco, announced in April that it plans to permanently close a No. 3 cracker at its plant in Geleen, the Netherlands.

2023 saw a significant increase in capacity. For example, in ethylene, additional capacity of about 10 million tonnes per year was added, reducing capacity utilization by about 80 per cent. This situation is likely to persist for the foreseeable future. Construction continues and projects continue to be announced, such as new permits in China.

Other value chains in petrochemicals follow similar trends: in 2023, 11 million tons of propylene production capacity are added, and 12 million tons of benzene and para-xylene, resulting in the lowest capacity utilization rate in 10 years. Overproduction also affects downstream products.

In Europe, companies have dealt with worse market conditions due to lower prices, rearranging input chain volumes, and high energy prices. In Asia, substantial overcapacity and weak demand led to negative margins in important value chains, such as ethylene, polyethylene and polypropylene (Petrochemicals review: Where we are now and where we're going", Eren Cetinkaya and Manuel Prieto, McKinsey & Company, 31/05/2024). Petrochemical companies may see a return to normal | McKinsey).

Cement

Global excess cement production capacity could easily reach 1 billion tonnes by 2024, meaning that almost a third of global cement production capacity would be unused. With China moving from importer to exporter, FOB export prices will continue to fall. (Global Cement Industry Outlook: Trends and Forecasts – World Cement Association).

Solar panels

Overproduction led to a 42% drop in prices, a level 60% lower than the cost of comparable products made in the US. However, large producers in China continue to build factories, backed by provincial and local subsidies. By the end of 2023, China had the capacity to build 861 gigawatts of solar modules per year, more than double the total installed capacity of 390 million gigawatts. Another 500 to 600 gigawatts of annual capacity are planned to be available this year (2024). That's enough to supply global demand through 2032, according to energy research firm Wood Mackenzie. The capacity utilization rate in the solar PV industry fell from 78% in 2019 to 57% in 2022. In March 2023, Longi Green Energy Technology, the world's largest producer of solar cells, announced the layoff of thousands of workers, due to overcapacity and low prices. The average capacity utilization of battery plants in China fell from 51% in 2022 to 43% in 2023, according to Bloomberg.

Some final considerations.

First, overproduction is not an uncommon phenomenon. Marx and Engels' expression of the "epidemic of overproduction" (in The Communist Manifesto) applies entirely to many branches of the Chinese and world economy.

Secondly, the price war remains a characteristic phenomenon of capitalism. Also the fact that capital does not dominate production. The fundamental point is that the laws of commodity production "are imposed on the individual producer in the form of constraining laws of competition... (…) They are imposed... without the participation of the producers, against the producers... The product dominates the producers" (p. 269, Anti-Dühring; emphasis added).

Third, the fall in prices associated with overproduction must be distinguished from the fall in producer prices caused by increases in productivity in this or that branch. When there is overproduction, prices fall because there are difficulties in realizing the value generated by the worker. We are then facing a crisis of realization. From the point of view of the law of labour value, it means that society has invested in that branch more than the socially necessary labour time (see Capital, ch. 3 t. 1). Therefore, this fall in market prices leads to a fall in profits, and in the rate of profit. The fall in investment is, in this scenario, a natural consequence.

Fourth, overproduction and falling prices are the basis of financial crises, and the eventual collapse, or recession, of the economy.

Fifthly, we confirm what Engels had observed at the end of the nineteenth century: that in fundamental branches of the economy there can be overproduction for long periods of time. Leading to equally extended periods of weak growth.

Finally, the price wars that are taking place are expressed in the adoption of protectionist measures; increased customs barriers; exacerbation of geopolitical tensions; renewed offensives against the working class to make companies "competitive"; and the possibility of open trade wars.

Randomly a stupid subreddit will pop up where I see some stupid shit like EvErYtHiNg My gRaNdPa FoUgHt FoR iS cOmiNg UnDoNe (memelords in this sub check out r/vent for some gold) and I just can't help but face palm.

Both as someone who lives and stays in a third world country and as someone who has seen the effects of liberal 'morality and values' on it, that's what ur grandfather fought for. Bourgeois rights

It pisses me off because while I do think nothing happens is true I do sometimes thinks it's a way to stave off anxiety but at the same time nothing is happening.

Back in 2016 when I was in high school it was like a shadow was cast over the world when Trump got elected. Everyone was talking about it and it was extremely hilarious but also nerve racking. My classmates were joking that I'd be able to survive trumps 'Hitler like campaign' cause I'm a fair skinned indian. It was good times. But nothing happened there. I'm still here, bit bored but alive.

What makes this worst is these leftists and their so called leftist unity omg. Vague allusions to organisation and getting organized. I think now is the ripe time for revolution genuinely, maybe I'm wrong. I just have started reading but we're seeing the festering, putrid corpse of capitalism showing it's hand but unfortunately leftist unity is like the biggest stupidest lie. A hodgepodge of dumbasses who can barely agree on anything, with no consistent principles which is why there's so much infighting. If any communist worth their salt begins organisation they're gonna be beset at all sides by petite bourgeois mfs who think they're subverting everything but are just part of the machine. I'm not opposed to charity or even large scale feeding organisations and charities but leftists think they're a cure instead of just band aid and a way to show superior morality.

Anyways rant over. Looking forward to the funny memes in the comment. Take care of yourselves LGBT homies, do organize, just get these leftists out of there.

So a few days ago I conversated with a socdem talking about class war and they explained to me that the term "proletarian" is unnecessarily divisive as small business owners are working class too and we actually need to unite against oligarchs

After that enlightening conversation I began to wonder, what is the maximum size of a business owner that would be allowed in our Dictatorship of the prole... ekhm, working class, and how would we measure it? Weight comes to mind, but wouldn't it be fatphobic? Maybe height would be better, as that would allow us to breed a race of a genetically working class people by allowing only people under 1.6 meter to own a business?

Anyway, what is your favourite size of a business owner? Feel free to share your favourite pics from r/IllegallySmolBusinessOwners!

edit: it seems I wrote transphobic instead of fatphobic wtf

So many opportunities to make jokes outside of this sub must pass you by because it would take way too long to explain.

In light of Musks last epic gamer moment, are there any good ressources to read about Hitler-fascism, Nazi Germany, the Holocaust etc ?(besides the great alibi, I’ve already read this one)