The excellent ICIS European margin report for ethylene shows an interesting picture this week. The chart above compares contract margins based on naphtha (red line) and LPG (yellow line) feedstock. Both have been slipping since September, when they peaked at €398/t and €357/t respectively. This week, they are over 40% lower, at €232/t and €208/t. […]
About Paul HodgesPaul Hodges is Chairman of International eChem, trusted commercial advisers to the global chemical industry. He also serves as a Global Expert for the World Economic Forum. The aim of this blog is to share ideas about the influences that may shape the chemical industry and the global economy over the next 12 – 18 months. It looks behind today’s headlines, to understand what may happen next in critical areas such as oil prices, China and Emerging Markets, currencies, autos, housing, economic growth and the environment. 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
The US housing market was worth $35bn a year in terms of chemical sales in 2006. In that Boom year, 2.2m homes were built, each using $16k of chemicals. But as the chart above shows, from the ACC’s weekly report, there has been a steady decline since then. The recent introduction of the $8000 first-time […]
LyondellBasell (LBI) yesterday confirmed the rumoured takeover bid from Reliance. In a statement posted on its website, it says it has “received a preliminary non-binding offer from Reliance Industries Limited to acquire for cash a controlling interest in the company contemporaneously with the company’s emergence from Chapter 11 reorganization“. It noted “this offer is in […]
The irresponsibility of some parts of the global banking system continues to upset the blog. First, there was news that several banks are planning to award themselves huge ‘bonuses’, based largely on their trading success. Yet the money they are using for this trading has mostly been provided by central banks and governments. And it […]
IPIC, Abu Dhabi’s International Petroleum Investment Company, made a very shrewd acquisition of Nova at the bottom of the market, earlier this year. And now they are apparently in talks with a number of major chemicals companies about joint ventures and possibly acquisitions. The key for IPIC is to obtain technology, with which they can […]
The Q3 company results season is now almost complete. It suggests that: • Companies still find it difficult to forecast revenue increases • Earnings are instead being boosted by cost cutting eg jobs In the US, the average workweek is now at a record low of 33 hours. Whilst EU companies are worrying whether today’s […]
In February, the blog worried that we were at the start of a cycle of deflation, as depicted in the above chart from Comstock Partners. The warning signs were that major excess capacity was developing in many industries, and some major countries were devaluing. Since then, the US and China have both undertaken competitive devaluations […]
Leading indicators are useful reference tools, but sometimes they can also mislead. The chart above, from the ACC’s excellent weekly report, seems to provide a good example of this problem. The blue line shows the official Leading Indicator for the OECD area plus the 6 major non-OECD countries. It suggests that a strong recovery is […]
The new World Energy Outlook from the International Energy Agency (IEA) spells out two major challenges. It: • “Identifies higher oil prices, coupled with the downturn in oil sector investment, as a serious threat to the world economy, just as it is beginning to recover“. • Suggests that “a profound transformation of the energy sector” […]
The blog regards Wal-Mart and other major retailers as excellent leading indicators of trends in the wider economy. It was therefore concerned to see CFO Tom Schoewe reporting today that Wal-Mart continues to “operate in a very challenging economy“, where the key driver is to provide “the lowest prices to our customers around the world.” […]
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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 as 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.