Archive | June, 2009

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Germany, China, struggle as exports slump

Germany and China have benefited massively from the growth in world trade since 1980. As the Wall Street Journal chart shows, 47% of Germany’s GDP comes from exports. And China has a 37% dependence. US exports are just 13% of GDP, so it is more self-sufficient. Both countries have punched above their weight in terms […]

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The blog’s 2nd birthday

The blog is now 2 years old. Its readership is very loyal, and continues to grow. 64% of current readers bookmark the blog, and read it regularly. And it is now being read in 2088 cities and 111 countries – versus 1244 cities, and 89 countries, 6 months ago. Its regular readership is also very […]

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Ineos agrees higher interest charges with lenders

Economic recovery can’t come soon enough for Ineos. After 7 months of negotiation, it has finally agreed new covenants for its €7.3bn of debt with its major lenders. These will now be put to all 230 lenders for approval by 17 July. But the price is high: • Initially, Ineos was paying c2.5% over euro […]

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Gasoline markets slip, financial markets stumble

Yesterday’s financial market action was very revealing. As Olivier Jakob of Petromatrix perceptively describes it, “liquidation on gasoline led to a correction in crude oil, which in turn pressured equity markets”. The problem is that financial markets now seem to be in circular mode: • Speculation about tighter oil markets has led to a belief […]

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World Bank sees deeper recession

The chemical industry is always a leading indicator of the global economy. One of the blog’s oldest friends used to be a central banker, and he made no secret of the fact that our discussions about demand levels were often an important factor in his overall analysis. So it is no great surprise that the […]

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After destocking, chemical volumes still down 15-20%

The great wave of destocking is finally coming to an end. And it is clear that underlying global demand is well below previous “normal” levels. The evidence for this can be seen in the above chart, based on American Chemistry Council data, which shows global chemical production down 12.8% in April versus 2008. And as […]

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Ineos appoint Morgan Stanley for Grangemouth

The blog’s close eye on Scotland’s media has again been rewarded this morning, as ‘The Scotsman’ reveals that Ineos have appointed Morgan Stanley, the investment bank, to advise on the sale of Grangemouth. It suggests that a company such as “PetroChina could buy the refinery, while Ineos would retain the polymer and petro-chemical processing plants […]

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Ineos talks of PetroChina deal for Grangemouth

The ‘Falkirk Herald’, based close to Ineos’s Grangemouth facility in Scotland, is not normally the place that the blog would look for news of the potential sale of a major part of the world’s 4th largest chemical company. However, that is what happened today, when the ‘Herald’ reported that Grangemouth site manager Gordon Grant had […]

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China aims to reduce imports

China has been a major beneficiary of the globalisation movement in recent years. In turn, it has become a tremendous importer of most chemicals. It accounts for up to 50% of total demand for many Asian chemical producers, and is a critical factor in most supply/demand balances. This position was already changing, however, as China […]

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Industrial output decline follows Depression trend

Sweden is an influential adviser on credit crunch issues. This is because of the lessons it learned during its own major banking collapse in the early 1990′s, which has close parallels with today’s global crisis. Its central bank argues that the main risk now facing the world is deflation, not inflation. It points to the […]

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