Archive | January, 2009

GDP forecasts.jpg

Most economic forecasts are too optimistic

Prof David Blanchflower, of the Bank of England, is not optimistic that the current recession will end soon. He notes that “few macro-economists actually spotted the greatest financial crisis in a hundred years”. And in the chart above, showing OECD forecasts for the UK economy during the last recession, he demonstrates that forecasters kept predicting […]

Continue Reading
Cramer.jpg

Cramer hits at Dow’s Liveris

The credibility of some chemical industry CEO’s seems to be under increasing attack, due to their apparent failure to develop proper contingency plans in advance of the current recession. One example this week comes from the USA, where Jim Cramer is one of the most well-known business TV commentators. He suggests that Dow’s CEO, Andrew […]

Continue Reading
IMF J09.jpg

IMF says “demand has collapsed”, sees “deflation risk”

A year ago, the International Monetary Fund rightly warned that the world was facing a “serious economic slowdown”. This week, it has updated its forecasts, and now “expects the global economy to come to a virtual standstill in 2009″. This will be “the lowest rate of global GDP growth since World War II”. As the […]

Continue Reading

Dow Chemical moves to Plan B

A month ago, after the collapse of the K-Dow deal, the blog suggested that Dow would need to move quickly to a Plan B. It added that “nobody would be very surprised if it now sought to renegotiate the proposed Rohm & Haas acquisition”. This now seems to be underway, judging by two pieces of […]

Continue Reading
Naimi right.jpg

Saudi cuts oil output below OPEC quota

Saudi Arabia, the world’s largest oil producer, now seems to be moving to Phase 2 of its efforts to achieve a $75 – $100bbl price range. As the blog noted in early December, the Saudis’ initial tactic was to play ‘hardball’ within OPEC. The aim was to ensure that other countries did not try to […]

Continue Reading
Untitled.png

Global chemical production down 4.4% in November

Global chemical production is now falling at an alarming rate, down over 4% in November, as core demand from housing/construction and auto markets collapses. Only the Middle East is now seeing positive growth year-on-year. As the chart shows (using ACC data): • N America is now down 12% • W Europe/C&E Europe are down over […]

Continue Reading
recession logo right.jpg

INEOS announce €1bn inventory loss in Q4

In early October, I forecast that we were about to revisit “the scariest moment of my 30 year chemical career”, adding that: “The moment the blog has long feared, and warned about, may be about to arrive. It appears that we may be about to revisit 1980, when for some weeks it seemed that demand […]

Continue Reading

Asian economies hit: US home starts slump

Asia is hard-hit by the downturn in the Western economy. Today, China said its Q4 GDP had grown just 6.8%, the slowest level since 2001. This led premier Wen Jiabao to say the outlook for jobs was “very grim”. It also increased speculation that China will devalue the renmimbi, which would increase trade tensions within […]

Continue Reading

INEOS, Georgia Gulf, Chemtura bond prices plunge

Bond markets are a good place to look if you want to understand the outlook for major companies in the chemical industry. A key market is in ‘credit default swaps’ (CDS), which offer insurance against the possibility that a company might default. The way they work is that the owner of a bond, or a […]

Continue Reading
Yangtze map right.jpg

Shanghai region slows

The Yangtze River Delta region (which includes Shanghai, Jiangsu and Zhejiang) accounted for 22% of China’s GDP in 2007. It is focused on exports to the USA and EU, and is a major centre for chemicals production. But now, like the Pearl River Delta, its economy is slowing fast. According to the China Daily, an […]

Continue Reading