Archive | April, 2011

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The other side of the China debate

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 […]

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Wal-Mart says consumers under “more pressure”

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 […]

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New Normal seminar in Frankfurt in June

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 […]

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Buy a US home – get a $17k car free

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 […]

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China’s empty shopping malls

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 […]

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Europe’s 2-speed auto market

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 […]

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Anecdotal evidence

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 […]

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Oil markets prepare for post-QE2 world

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. […]

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Ethylene derivative imports threaten European markets

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 […]

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China’s inflation out of control

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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