Nothing has really changed over the past year. That seems to be the key conclusion from the blog’s quarterly summary of company results for Q1.
A year ago, BASF noted that “achieving our earnings target is significantly more challenging today than we had expected”. This month, chairman Kurt Bock “warned the markets will remain volatile and challenging, with persistent negative currency effects“.
In the US, despite the benefits of shale gas, operating rates (OR%) remained at an anaemic 75.8% in April according to American Chemistry Council data, whilst OR% for plastic resins fell to 86.4% from 90.2% in April 2013.
Each quarter we are assured by policymakers that recovery is now certain. But every quarter we are disappointed, with most companies facing headwinds. Thus the blog continues to argue that companies need to assume that its Demographic Scenario is the most likely outcome.
The benefit of this Scenario is that it explains the economic developments of the past 50 years in a simple and common-sense fashion. It does not require us to believe that central bankers have somehow become ‘Masters of the Universe’, able to change people’s entire behaviour via the simple manipulation of monetary policy.
Its APPLY workshop programme is an excellent way for company boards and senior executives to understand the real challenges and opportunities for their business. More details are in its Value Proposition.
The rationale for the workshop is very clear:
- The blog’s outlook has proved to be correct since 2009
- This repeats its success in forewarning of the likely sub-prime crisis, also a non-consensus view at the time
- Its Boom, Gloom and the New Normal eBook (with co-author John Richardson), provides a clear picture of what companies need to do in terms of product development, manufacturing and commercial direction.
The choice is becoming very simple, now that China’s President Xi Jinping has signalled his country’s move into the New Normal. Companies can either look forward to the future, or they can be left behind. The blog will be delighted to help you look forward.
Air Products. “We remain focused on continuing to increase productivity and generate benefits from further price and cost actions”
AkzoNobel. “Revenues were down across the company’s three key divisions of decorative paints, performance coatings and specialty chemicals, despite an across-the-board increase in volumes”
Ashland. “More work to do in driving growth and removing costs”
BASF. “Markets will remain “volatile and challenging”, with persistent negative currency effects”
BP. “Petrochemicals environment continues to be challenging with excess supply affecting product margins”
Bayer. “Higher volumes for most regions and lower raw material costs”
Borealis. “Good performance at its polyolefins business and the start-up of its Borouge 3 cracker”
Celanese. “Higher VAM pricing, plus closure of two plants, more than offset higher raw material and energy costs”
Clariant. “An improving but still mixed economic environment”
Dow. “Predicted a slow global economic recovery characterised by continued volatility”
DSM. Lower prices and exchange rate effects offset a 3% increase in volumes”
DuPont. “Anticipated growth in global industrial market demand”
Eastman. “Global economy continues to be lacklustre”
Evonik. “Selling prices for some important products were well below Q1 2013 due to challenging market conditions”
ExxonMobil. “Weaker margins decreased earnings by $90m; volume and mix effects increased earnings by $40m”
Honeywell. “Cautiously optimistic on the macro environment”
Huntsman. “Improved performances across all business segments with the exception of some polyurethanes”
Indorama. “Rapidly falling feedstock prices led to the weaker absolute prices of commodity products”
Linde. “Exchange rate effects had a significant adverse impact on growth”
LyondellBasell. “Profits from the US olefins and polyolefins businesses were down sharply”
Methanex. “Industry demand remains steady, particularly for methanol into energy”
Nova. “Higher polymer sales prices and lower feedstock costs, offset by lower product sales volumes”
OMV. “Margins improved mainly due to increased propylene prices”
Olin. “Lackluster chlorine and caustic soda sales were a drag on overall financial performance”
Oxychem. “Lower caustic soda prices driven by new chlor-alkali capacity in the industry”
PPG. “Anticipate solid global growth to continue, but it will not be uniform across geographies or end-use markets”
PetroChina. “Prolonged weak conditions”
PetroLogistics. “Improvement in consistency in demand of propylene derivatives because of better economic indicators”
Phillips 66. “Higher olefins and polymers and benzene margins”
PKN Orlen. “Deterioration of model olefins margin as well as PTA and butadiene margins
Praxair. “Modest growth in line with the current macro-economic environment”
Reliance. “Earnings grew sharply with margin expansion across polymers and downstream polyester products”
SABIC. “Lower product prices offset rise in production and sales volumes”
Saudi Kayan. ” Higher production and sales volume despite a decrease in average sales prices”
Sherwin-Williams. “Impact of harsh weather on domestic sales in the quarter was modest”
S-Oil. “PX market conditions not likely to change much from the soft H1 2014”
Shell. “High volatility remains in the macro-environment”
Sinopec. “High and volatile feedstock prices, declining chemical product prices and other challenges”
Solvay. “Improved demand and benefits from our excellence initiatives”
TOTAL. “Implementation of performance improvement plans by the segment”
Trelleborg. “Not received any indication of a general improvement in the demand situation”
Unipetrol. “Robust olefin and polyolefin margins”
Versalis. “Weaker product margins and sales volumes”
Wacker. “Restructured its contractual relationships with a solar-sector customer”
Westlake. “Benefited mainly from higher olefins volumes and improved integrated product margins”
Yansab. “Decrease in net profit is attributable to lower sales prices of certain products and increase of cost of sales”