A FULL two percentage points of US third quarter growth of 3.5% was down to stock building. Total US inventories grew by $76bn in Q3 following a $37bn contraction in the second quarter. The fourth quarter is always a period of destocking in the US and everywhere. This will combine with the big build-up in […]
Asian Chemical Connections
US Import Tariff Decision: Impact On Polyethylene And The Global Economy
By John Richardson THE PROSPECT of a US-China trade war has edged closer as a result of President Trump’s announcement yesterday that the US will impose 25% import tariffs on steel and 10% import tariffs on aluminium. Countries hit hard by the tariffs will include China and Canada. We luckily avoided a trade war in […]
Stock Markets: Real Implications For Petchems and Risks Of A “Cynical Bubble”
By John Richardson WHEN stock markets are rising, the proverbial garden can look as if it is blooming with summer flowers without a weed in sight. But the underlying data suggest wealth inequality is still a major issue in the US, with the inequality creating iconoclastic politics in the US that continue to threaten a […]
Asian Petchems Profits Could Test Historic Lows In 2018
By John Richardson THE ASIAN steam cracker business has struggled to pass on higher oil prices as the above chart further underlines. As you can see, high-density polyethylene (LLDPE) injection grade spreads including selected co-products have slipped over the last few months. Spreads are a rough but still useful measure of profitability, and so tell […]
US Stock Market Decline Highlights Consumer Spending, Income And Debt Risks
By John Richardson THE SUSTAINABILITY of the US economic recovery rests on the willingness of people who cannot afford to spend money to continue to spend money. In order to explain what I mean, let’s start with income and wealth distribution in the US. A US Federal Reserve study showed that the 90% of US […]
US Fed policy may be going Back to the Future
by Paul Hodges Today’s 419 point fall on the Dow Jones Average, and $6/bbl fall in WTI crude oil prices, may not be just another example of the wild volatility that has come to seem normal in financial markets. It may also mark the end of an era. Since 1994, the US Federal Reserve has […]
Financial Sector Fear Looms Large
By John Richardson WE will explore the following issues in a lot more detail over the coming days, assuming that the crude and financial market turmoil continues. But for now here follows the interpretation of the crisis from a source with a major polyethylene (PE) producer. The themes are consistent with what we have been picking up […]