US and European auto sales fell again last month. GM reported total US sales down 27% versus 2007, due to a ‘challenging US economic environment’ Toyota were down 19%, with Lexus sales badly hit, down 25% Ford were down 13%, and said they ‘expected H2 to be more challenging than H1, as economic and credit […]
Chemicals and the Economy
US banks tighten corporate/consumer lending
Tighter lending standards, and higher spreads for borrowers, are continuing to create headwinds for the US economy. As far back as January, senior loan officers at major US banks were reporting that they were tightening mortgage lending standards. Yesterday, the latest quarterly US Federal Reserve survey showed that 60% of banks have now tightened their […]
‘Grey hair and good advice matter’
The credit crunch began a year ago. At that time, the blog was very much in a minority when worrying that it might turn into something big enough to impact ‘the real economy’. A year later, it is fascinating to review the crunch’s impact so far, and how people’s attitudes have changed:
Corporate defaults could reach 10%
Chemical company CFOs need to step up their monitoring of customers’ creditworthiness. That’s the clear message today from ratings agency Moody’s, who report that corporate defaults are rising sharply. According to Moody’s Director, Kenneth Emery, ‘the pace of corporate defaults increased considerably in July as economic conditions weakened and more companies experienced financial distress. Under […]
German and Spanish economies turn down
I noted last month that German industrial production fell 2.4% in May, and that Chancellor Angela Merkel was expecting ‘a significant fall’ in economic growth for 2009. This fall now seems to be already underway. Industrial output fell by a further 2.9% in June, and for the seventh month in a row – the longest […]
China faces ‘economic restructuring’
A year ago, it was fashionable to claim that the Asian economies had ‘decoupled’ from the West. Any slowdown would simply pass them by. Last December, I noted a rare dissenting voice, Stephen Roach of Morgan Stanley, who commented that ‘decoupling is a good story, but its not going to work going forward’. In March, […]
Current shipping costs = 9% trade tariff
I noted in June that P&G were reviewing their global supply chain strategy, as a result of higher oil prices. Now a study by Canadian Bank CIBC suggests the rise in shipping costs equals a ‘9% tariff on trade’, adding that ‘the cost of moving goods, not the cost of tariffs’ is now the ‘largest […]
No news from Iran on nuclear issue
There seems to have been no response from Iran to the 2 week deadline set by the US and Europe on the nuclear issue. Over the weekend, Iran’s President, Mahmoud Ahmadinejad said ‘the Iranian nation would not retreat one iota from its rights.’ Earlier, Israel’s deputy Prime Minister, Shaul Mofaz, had also taken a hard […]
Cracker margins under pressure
Paul Ray’s excellent ICIS PE margin report provides plenty of food for thought this week. The chart above shows that European LDPE prices (the red line) have moved up quite sharply since June. But almost all of this improvement has been captured by cracker operators. Margins for integrated players (in yellow) recovered quite nicely, but […]
‘2009 – another difficult year’ says BMW
BMW, the world’s largest luxury car manufacturer, warned today that it is no longer immune from the global downturn: ‘Business conditions for the automobile industry deteriorated sharply again in the second quarter due to further ongoing steep rises in oil and raw material prices, the weakness of the US dollar, the impact of the international […]
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