There are always two sides to every debate. Dow Chemical CEO, Andrew Liveris, clearly has a radically different point of view to the blog’s about the likely outlook for China’s demand. Liveris told analysts in this week’s earnings call that “any indications of high inventories (in China) are likely to be transitory“. As ICB editor […]
Archive | April, 2011
The major retail groups are excellent indicators of future trends in chemical consumption. Since before the Crisis began, consumers have been focusing more on price and value-for money. Now Wal-Mart is reporting that consumers face “more pressure than a year ago“. This suggests that demand destruction is already well underway. And Wal-Mart CEO Mike Duke […]
A major demographic shift is underway in the Western population. 253 million babies were born in the 1946-70 period in the G7 wealthiest countries (USA, Japan, Germany, France, UK, Italy, Canada). They have driven consumer spending over the past 15 years, as the majority of them moved into the 25 – 54 age group. This […]
The New Normal has definitely arrived in the US housing market. US new home sales are down 80% from their peak, and builders are getting desperate. Offers in the Chicago area now include a $17k credit for a GM car, when a buyer closes the deal. As the New York Times comments, “a long-term shift […]
The South China Mall opened nearly 6 years ago. Nearly 3 times the size of Minnesota’s vast Mall of America in the USA, it supposedly symbolised China’s arrival as a consumer power. But as this Australian TV video shows, the Mall today is virtually empty. As are numerous other shopping malls built more recently. Yet […]
EU auto sales are a critical market for chemical companies. So far, 2011 volumes have been stable, down just 2% in Q1 versus 2010. But the trend seems to be weakening, with March volumes at 1.6m down 5% (red line), as shown in the above chart based on ACEA data. The key worry is the […]
ICIS pricing reports are a treasure trove of information for buyers and sellers. They can also provide an interesting insight into the overall mood of the chemical industry. This might be one of those times. My blogging colleague, John Richardson, noticed several pricing reports mentioned last week that buyers were operating on a ‘hand to […]
The decision by S&P, the ratings agency, to put the USA’s AAA debt rating on review is a potential game-changer for US economic policy. It means that policymakers can no longer pretend the $5trn they have spent over the past 2 years on stimulus measures somehow “doesn’t count” in terms of needing to be repaid. […]
The chart above is a flashing amber light for European cracker operators. Based on ICIS Pricing data, it shows the delta between (a) European and US ethylene contract prices (blue line), and (b) Europe and the North East Asian spot price (red line). Usually, these deltas range between -$50/t and $100/t. H2 2008 was clearly […]
China’s inflation hit 5.4% last month. As the chart above shows, it has more than doubled over the past year. And food prices jumped 11.7%. Clearly, inflation is now out of control, with the Ministry of Finance admitting the situation is “severe and hard to handle“. A sign of the scale of the problem is […]
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Paul Hodges is Chairman of International eChem, trusted commercial advisers to the global chemical industry.
The aim of this blog is to share ideas about the influences that may shape the chemical industry over the next 12 – 18 months. It will try to look behind today’s headlines, to understand what may happen next in important issues such as oil prices, economic growth and the environment. We may also have some fun, investigating a few of the more offbeat events that take place from time to time. Please do join me and share your thoughts.
Between us, we will hopefully develop useful insights into the key factors that will drive the industry's future performance.