Crude oil and commodities markets have lost touch with the fundamental realities. This didn’t just happen yesterday, but began a decade ago. That’s the argument put forward by my co-author, John Richardson, in the latest chapter of our new free eBook, ‘Boom, Gloom and the New Normal – how the Western BabyBoomers are changing chemical […]
Archive | July, 2011
Last month, the blog suggested that CEOs might want to warn investors of the threat to earnings from high oil prices, unemployment and economic fragility. BASF, the world’s largest chemical company, have done exactly this today. New Chairman, Dr Kurt Bock warned: “The economic risks remain: We continue to be concerned about the development of […]
As promised yesterday, the blog looks today at the impact of high frequency trading (HFT) on oil markets. This now takes place in micro-seconds. It is algorithm-driven via ‘black boxes’, and so fast that as Andy Haldane of the Bank of England notes: “Around 40,000 back-to-back trades can take place in the blink of an […]
The world’s major central banks, particularly the USA and China, have been the main driver of financial markets since the start of the Great Recession, due to the liquidity they have provided: • China’s credit bubble has funded astonishing growth in futures markets • Monthly volume in LLDPE* (above) has averaged 44MT since Q4 2008 […]
When you’re the world’s richest man, and have committed $36bn to philanthropy, you don’t have to be politically correct. Thus the blog was delighted to see Bill Gates’ interview on energy needs with Wired magazine, where he noted: • “The solutions that work in the rich world don’t even come close to solving the energy […]
Petchem markets have moved into an interesting phase. Optimists will point to the recovery in crude oil and financial markets, plus higher prices for naphtha and benzene. They will see these as signs that we are just in the middle of a typical correction. And they will hope for further price increases over the summer. […]
Greece is about to become the first developed country to default on its debts since 1964. On Thursday night, Eurozone leaders finally agreed to reduce Greece’s €350bn debts, if only by 21%. They also agreed to take the first steps towards the creation of a European Monetary Fund. After more than a year of defying […]
This week’s special blog series has focused on auto markets, a critical source of chemical demand. Today, it concludes by summarising developments in China, USA, EU, which account for ~55% of global sales. They have moved in different directions since the Great Recession began: • China’s volumes soared in 2009-10 • The USA has fallen […]
China’s auto industry has seen extraordinary growth since the downturn began in the West in Q4 2008. The government encouraged lending, and also cut taxes on auto sales. As a result, sales jumped 49% in 2009, from 6.9m to 10.3m. And then they jumped a further 29% in 2010. In 2011, however, sales have slowed […]
The auto industry is a major source of global chemical demand. Today, at the half-year point, the blog begins a 3-part series analysing auto sales trends in Europe (today), China (tomorrow) and total EU, China and USA sales (Thursday). Click here for current USA analysis. For the past few months, Europe has seen a two-tier […]
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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.