BASF, the world’s largest chemical company, said today that they see “weak demand for chemical products” continuing through 2009. In response, plants and sites “will be closed or sold where necessary”. These are clear statements about the outlook, backed up by commitments to take action. Yet volumes and prices in financial markets are rising, as […]
Chemicals and the Economy
Rotterdam oil storage running out of space
Today saw further anecdotal evidence of speculative crude oil buying. A senior manager at the Port of Rotterdam told Bloomberg that oil inventories were the highest he had seen since he began work there in 1985. Rotterdam can hold 75 million barrels. Whilst there are also reports of tankers at anchor along the UK’s southern […]
Exporting is no fun anymore
Japan and Germany are the great exporting countries of the industrialised world. They didn’t have the consumer booms seen in the USA and UK. Yet their economies are plunging, as export opportunities dry up. Yesterday, the Japanese finance minister, Kaoru Yosano, told parliament that the country was in “an economic crisis”. These are strong words, […]
GM bankruptcy threatens auto supply chain
It seems highly likely that GM, the largest US car manufacturer, will enter Chapter 11 bankruptcy proceedings in the next few weeks. Chrysler, the 4th largest US company, may well follow them. Even if it avoids bankruptcy, GM’s own restructuring plan has the potential to be equally traumatic. It is based on a forecast US […]
Oil market “bubble” builds, as recession deepens
Stock markets may have rallied over the past month. But the International Monetary Fund (IMF) sees no cause for optimism. In March, it thought the economy would contract by 0.5% – 1.0%. Now, it is forecasting a contraction of -1.3% in 2009. The chart, from the Wall Street Journal, compares the current downturn to the […]
Akzo results show depth of the downturn
The blog’s chemical career began with selling raw materials to the paint industry during the recession of the early 1980’s. Since then, it has always regarded the decorative paint sector as an excellent real-time indicator of underlying economic conditions. Today’s results from Akzo, one of the global leaders, confirms the sector’s reputation. Akzo said decorative […]
GM plans 2 month summer shutdown
The prospect of bankruptcy is finally sharpening the knife at GM. As the blog noted last month, inventories are at astronomical levels. 781000 vehicles were in stock at the end of February, and this figure had only dropped by 15000 vehicles during March to 765000 vehicles. This equates to around 6 months supply. Now the […]
Deflation worries hit Europe
Parts of Europe are now following the US lead and seeing deflation. Spain saw prices fell 0.1% last month, for the first time since records began in 1961. In the UK, the retail prices index fell 0.4%, to register the first decline since 1959. Prices have also fallen in Portugal, Ireland and Luxembourg Economists have […]
US Treasury’s bank stress test “meaningless”
The blog was never convinced by US Treasury Secretary Paulson’s efforts to manage the financial crisis. Its view was that Paulson avoided the real issues, and focused instead on trying to boost market sentiment. Worryingly his successor, Tim Geithner, seems to have inherited the same mindset. 2 months ago, Geithner announced that 19 major US […]
US thermoplastic stocks fell 31% from 2008 peak, demand fell 17%
The above chart is a real ‘labour of love’ by the American Chemistry Council. It represents their best statistical effort to model: • Change in inventories for the major thermoplastics • Change in underlying demand for them, down the value chain This is critically important for the chemical industry, as it shows what is really […]
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