The risk of global recession continues to rise, with the World Bank last week warning that “the real-side recovery is weak and business sector confidence is low“. Spain, the world’s 12th largest economy, provides a good example of how the problems are spreading. Financial markets have temporarily decided that it has ‘turned the corner’, due […]
Chemicals and the Economy
Global economy faces difficult 2013
Its now 4 years since the blog published its first New Year Outlook in ICB. Then it was in a small minority when advising CEOs “to prepare for a marathon not a sprint” in dealing with the financial crisis. And very few accepted its suggestion that it was “unlikely that governments will quickly find a […]
EU chloralkali markets weaken in H2
Chlorine and caustic soda production are a key indicator of economic growth. They have been produced in large volumes for over a century, and have a extremely wide range of uses from pharmaceutical and aluminium production to detergents and disinfection. The blog’s mid-year review of European data from Eurochlor showed worrying signs of a slowdown, […]
Cracks appear in crude oil pricing
Crude oil and the major commodity markets have been a “fool’s paradise” in the past 4 years, created by the arrival of the central banks’ massive liquidity programmes. Pension funds rushed to buy, in the belief they would be a “store of value”. Hedge funds followed them as a momentum play, encouraged by analyst reports […]
China’s growth slows now Party Congress has ended
China, like the USA, had a leadership transition in November. And, of course, this led to led to some effective ‘massaging’ of the economy in the preceding months. As the blog noted in November, it was no coincidence that bank lending jumped $1.1tn between May-October, to ensure local communist party chiefs got the projects they […]
Volatility rises as players bet on recovery or recession
Nobody ever said that financial and chemical were meant to be easy to understand. But current developments are clearly far more complex than normal. We have grown used to manipulation by policymakers, via their various quantitative easing (QE) programmes. But today, we also have completely opposite views in the markets themselves: • Benzene prices (green […]
Sustaining growth as the West reaches the ‘demographic cliff’
2013 is the year that the Western world reaches the ‘demographic cliff’. Its BabyBoomers (born between 1946-70) are the largest and wealthiest generation that the world has ever known. Now they are ageing rapidly. They have less money to spend as they move towards retirement. And they mainly buy replacement products, not new ones, as […]
Oil prices at record level for 2nd successive year
Crude oil prices remained at a record level for the second year running in 2012. As the chart shows, Brent prices averaged $112/bbl versus $111/bbl in 2011 (blue line). By comparison, 2008 averaged $97/bbl, or $102 if adjusted for inflation (red): • 2008 still holds the record for the highest-ever daily price at $144/bbl on […]
US auto buyers prefer new to old, as used market tightens
December saw continued strong volume in US auto markets, with sales (red line) at pre-Crisis levels for the month. The key driver is the need to replace ageing vehicles, but manufacturers were also generous with rebates and credit offers to help clear inventory: • Overall, 2012 sales were up 13% versus 2011 at 14.5m • […]
Affordability, not luxury, the focus for China’s new leadership
Half of China’s population lived in abject poverty as recently as 1979, with incomes less than $2/day. Since then, economic policy has largely focused on reducing this number. As the chart shows, only 7% are still in this position (brown column). Instead, 70% now earn $2 – $10/day (green), and 19% have incomes up to […]
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