China’s smartphone market goes ex-growth as costs fall to $20

China has the highest smartphone penetration in the world at 62%.  It had 632m mobile subscribers, with 70% of new connections based on 4G connections.   But sales actually fell in Q2 by 4%.  This was the first time they have ever fallen and is further confirmation of the major change taking place in China under […]

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Outlook for the global aromatics industry – insights from senior executives at Amsterdam Conference

Aromatics markets often lead petrochemical markets, and provide good insight into economic trends.  This has certainly been true of PTA (terephthalic acid) and benzene over the past year. PTA demand into polyester and PET is dominated by Asia: benzene’s wide variety of uses means it is a good proxy for industrial production in Europe.  Recent developments have been […]

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Contagion hits financial markets as Great Unwinding continues

Crude oil prices continued to fall towards $30/bbl last week.  Markets are finally starting to recognise, as the BBC reported last year, that ‘China fooled the world‘ with its stimulus programme. It had not suddenly become middle-class by Western standards in 2009.  Instead, aided by developed country stimulus policies, its own stimulus had helped create […]

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Inflation turns to deflation as stimulus debt now has to be repaid

Its not what we know that causes the major problems.  Its what we think we know, but don’t. We know, for example, that markets balance supply and demand by shifting prices up and down.  Too much demand and/or too little supply, will mean higher prices and inflation.  This is what happened as the BabyBoom took place: Medical […]

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“If the lips are gone, the teeth will be cold”: China’s New Normal policies require companies to undertake radical strategy reviews

Wishful thinking can be terribly dangerous for company profits.  Taken to extremes, it can lead them into bankruptcy. Recent developments in China thus make it essential for every company to immediately review its strategy for doing business in/with the country, against a realistic outlook for 2016-2018 GDP growth will likely be zero, and could well […]

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Oil heads to $30/bbl as Great Unwinding reaches 1st anniversary

Global markets are becoming ever more complex as the Great Unwinding of stimulus policies continues.  This means that each blog post is now taking much longer to write.  It therefore seems sensible to focus on writing 3 posts each week - on Monday, Wednesday and Friday – in order to continue to provide the highest possible […]

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FT

Older people are being forced to spend less

The Financial Times has kindly today printed my letter below, commenting on the change taking place in demand patterns as a result of ageing populations. Sir, It was interesting to see the UK’s employment and pension ministers reminding FT readers that “by 2022, there will be 3.7m more people aged between 50 and state pension […]

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The blog returns on 17 August

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Question mark

Q2 results highlight continued uncertainty over outlook

The chemical industry continues to be the best leading indicator we have for the global economy. Whilst stock markets were continuing to move higher during H1, its depressed level of capacity utilisation was signalling that the economy was far more fragile than generally realised. Company results for Q2 reflect this concern. Of course some, tied […]

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US house pricesJul15

US housing sees major change as middle-market is squeezed

US house prices have recovering for 3 years, as the chart from the Wall Street Journal confirms.  It shows two lines: The dark blue line is money of the day: prices rose steadily from 1989, peaking in 2006 at 141% of 1989 value The grey line adjusts for inflation: “real prices” were negative until 2000, […]

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