About Paul Hodges

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 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.

Author Archive | Paul Hodges

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Dow warns of need for “radical actions”

Andrew Liveris, Dow CEO, has consistently warned that we are facing a major recession. Today, in a Bloomberg interview, he spells out the need for “radical actions” to “take out capacity”. He notes that Dow’s volumes are down 10%-20% this quarter, and expects this to continue into H1 next year. And he forecasts that “we […]

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Survival tips for CFOs

The Financial Times series on surviving the downturn focuses this week on CFOs. It includes advice from Feike Sijbesma, CEO of DSM, who suggests that “you need to see how creditable your debtors are, very quickly”, and advises that “maintaining a good relationship with your creditors and banks is also critical”. The Key Tips from […]

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Credit crunch causes demand destruction (2)

I gave an interview to ICIS radio at EPCA in September, in which I warned that the destocking process would go through two phases: • The first, which took place during Q3, was when companies destocked in response to the falling oil price, to a more “normal” level of stock • The second, which would […]

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Bank of England warns on deflation

The UK’s Finance Minister said today that interest rates might need to be cut “to an unprecedented zero”. And the Bank of England warned there is a real “risk of persistent and damaging falls in prices”. Deflation would be a major challenge for chemical companies, for two main reasons: • Demand is deferred, because prices […]

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Russia’s economy stalls

A few months ago, Russia’s economy seemed to be recovering from its problems in the late 1990′s. High prices meant oil revenues were increasing, and the currency was strong. Now, the combination of the oil price collapse and the credit crunch has reversed the position. Yesterday, the central bank was forced to raise rates to […]

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The “crystal blog”

The blog’s forecasting record is reviewed in ICIS Chemical Business this week. Click here if you would like a copy. The blog’s aim is to “highlight relevant information for the busy executive, and to provide relevant and actionable analysis of key issues”. The article particularly notes the blog’s willingness to challenge consensus forecasts. The blog […]

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AIG becomes a “zombie” company

2 months ago the blog raised 5 key questions about the $700bn US bailout. Yesterday’s news about additional government funding for insurance giant AIG confirms its concerns. Originally, the US Treasury had insisted it would only support “healthy” firms. Now, this fiction has been abandoned. After AIG announced its 4th straight quarterly loss ($24.5bn), its […]

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G-20 tries to support growth

The G-20 was created in 1999, after the financial crises that had hit emerging countries from 1997 onwards. It includes the G7 group of major industrial companies, plus the main emerging economies, including the BRIC countries (Brazil, Russia, India, China). Its ministerial meeting this weekend became a preparatory session for its first-ever Heads of State […]

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“Fundamental reassessment of the value of virtually every asset”

“Our normal customers have no orders to place with us, and our credit department won’t let us sell to others who might want to buy”. The blog was given this plain-spoken assessment of current chemical market conditions by one of the majors yesterday. Coincidentally, US Fed Governor Kevin Warsh was making one of his rare […]

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4 tips for survival

Last month, the blog titled its 2009 Outlook, Budgeting for Survival. This week, the Financial Times has begun a series on developing recession survival strategy. Its key tips are: • Manage your cash. Don’t spend money unnecessarily. • Keep a strong balance sheet. Have as little debt as possible. • Price your products/services keenly. Be […]

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