About Paul Hodges

Paul Hodges is Chairman of International eChem, trusted commercial advisers to the global chemical industry. Paul is also an invited member of the World Economic Forum’s Global Agenda Council. 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

Asian economies hit: US home starts slump

Asia is hard-hit by the downturn in the Western economy. Today, China said its Q4 GDP had grown just 6.8%, the slowest level since 2001. This led premier Wen Jiabao to say the outlook for jobs was “very grim”. It also increased speculation that China will devalue the renmimbi, which would increase trade tensions within […]

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INEOS, Georgia Gulf, Chemtura bond prices plunge

Bond markets are a good place to look if you want to understand the outlook for major companies in the chemical industry. A key market is in ‘credit default swaps’ (CDS), which offer insurance against the possibility that a company might default. The way they work is that the owner of a bond, or a […]

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Shanghai region slows

The Yangtze River Delta region (which includes Shanghai, Jiangsu and Zhejiang) accounted for 22% of China’s GDP in 2007. It is focused on exports to the USA and EU, and is a major centre for chemicals production. But now, like the Pearl River Delta, its economy is slowing fast. According to the China Daily, an […]

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IEA revises down oil demand

The International Energy Agency (IEA) has cut its estimate of expected global GDP growth in 2009 to just 1.2%. It therefore expects the world to record its first back-to-back annual decline in oil demand since 1982/3. It says oil production last month was unchanged at 86.2mbd, despite OPEC cutbacks and the first fall in Russian […]

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Middle East liquidity dries up

In the soccer world, the UAE has been making headlines this week. It is proposing to fund the first-ever £100m ($150m) transfer – of the Brazilian player, Kaka, to Manchester City. But behind the scenes, the collapse of the oil price has been playing havoc with the economies of the Gulf countries (GCC). HSBC, for […]

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Moody’s worries about the chemical industry

Moody’s, the global ratings agency, is today forecasting a 70% chance of a U-shaped recession, and a 15% chance of either a V or L-shaped downturn. This broadly agrees with the blog’s own view, set out a month ago. Moody’s also singles out the chemical industry as being one of those most at risk from […]

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Eurozone under pressure

Early last year, the blog flagged up a warning from Gillian Tett in the Financial Times that Iceland could go bankrupt, as its banks were “too big to rescue”. Yet at the time, the United Nations had listed it as having “the highest standard of living of any country” in the world. Unfortunately, however, Iceland’s […]

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Dow’s debt ratings cut – could hit junk status

Over the last few weeks, INEOS had to scramble to get a covenant waiver from its lenders, and Lyondell went into Chapter 11. Now Dow’s debt is facing a potential cut to junk status from the main ratings agencies. Dow’s rating has already been cut, following the collapse of the K-Dow deal with Kuwait. And […]

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Crude oil trading hits new record

The ever-interesting PetroMatrix report notes that 2008 saw record volumes of crude oil trading. As their chart shows (above), the volume of trading on futures markets in 1995 was equal to daily oil production volumes. By 2000, the ratio had reached 2 : 1, and by 2005 it was 3 : 1. The ratio then […]

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European auto sales to fall 16% in 2009

European auto sales fell 8.4% in 2008, versus 2007. Sales of 13.56m autos were just ahead of the USA’s 13.2m. European volumes continue on a worsening trend, with December down 19% versus last year: • Spanish sales were down 50% • Sweden was down 45% • The UK was down 21% • The Netherlands were […]

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