Archive | June, 2012

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The blog’s 5th birthday

The blog today celebrates its fifth birthday. Its 1400 posts since the June 2007 launch have covered a wide range of subjects. And one thing is certainly true. There has never been a shortage of topics to cover. Readership has also continued to grow very steadily. As the map shows, the blog is now read […]

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Brazil’s PE exports increase as its economy slows

Brazil’s economy has soared in recent years, as its raw materials have supplied China’s infrastructure boom. China now accounts for 17% of total exports, and has replaced the USA as its largest trading partner. In turn, of course, this led to major growth in Brazil’s own chemical demand. Its polyethylene (PE) imports grew 78% from […]

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Morgan Stanley says commodity supercycle a myth

Morgan Stanley’s head of emerging markets seems to share the blog’s belief that the current oil and commodity ‘supercycle’ is simply a speculative frenzy. Writing in the Financial Times, Ruchir Sharma notes: “The daily news about falling oil prices is the beginning of a major shift in the global economy: the end of the “commodity […]

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China’s PE demand continues to weaken

China’s polyethylene (PE) demand continues to highlight the slowdown underway in the wider economy. As the chart shows for the January- May period, based on data from Global Trade Information Services: • Overall demand (red column) was down 5% versus 2010 (blue) • China’s production continued to increase, up 1% • Imports were down 9%, […]

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Another Minsky Moment may be approaching

The global economy is now in the middle of its 3rd downturn in the past 4 years. The chart above shows how the blog’s benchmark products have acted as leading indicators on each occasion (yellow highlight): • In 2008, naphtha (red line) PTA (purple), benzene (green) and polyethylene (PE, blue) all peaked around the middle […]

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Oil prices fall as West, Saudi, pressure Iran

Oil markets have weakened significantly since they fell out of their major ‘triangle’ formation earlier this month. WTI is already within the forecast $60-80/bbl range although, as the chart shows, Brent still maintains a $10/bbl premium at $90/bbl. Of course, charts can only display the change in sentiment and direction. They cannot explain why it […]

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Eurozone crisis gets worse, not better

Global bond investors have found a new worry. 10 year interest rates in Spain, the world’s 12th largest economy, have risen alarmingly in recent weeks. As the chart shows, they are now above 7% (blue column) compared to 4% when the blog first focused on the Eurozone crisis (red). 7% is a critical level, as […]

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High oil prices hit retail spending

Brent oil prices have just finished a record sequence of 240 days above $100/bbl. This was longer than the 170 days in 2008. And longer, on an inflation-adjusted basis, than in any previous period of high oil prices. In Europe, prices were actually higher than in 2008 due to the lower value of the euro […]

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China battles economic slowdown

Wenzhou in coastal Zhejiang province was the first city to encourage private enterprise when China began opening its economy in 1978. Its growth accelerated after China joined the World Trade Organisation in 2001, attracting 2.8 million migrant workers to join the city’s population. Now its 9 million people are at the forefront of China’s slowdown, […]

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Financial markets rally as real economy weakens

Petrochemical markets continue to provide plenty of warning signs about the deteriorating state of the global economy. As the above chart shows of price movements since January, even benzene is now weakening as supply disruptions fade. The obvious conclusion is that downstream users have simply been unable to pass through recent increases. Instead, these further […]

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