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

No news from Iran on nuclear issue

There seems to have been no response from Iran to the 2 week deadline set by the US and Europe on the nuclear issue. Over the weekend, Iran’s President, Mahmoud Ahmadinejad said ‘the Iranian nation would not retreat one iota from its rights.’ Earlier, Israel’s deputy Prime Minister, Shaul Mofaz, had also taken a hard […]

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Cracker margins under pressure

Paul Ray’s excellent ICIS PE margin report provides plenty of food for thought this week. The chart above shows that European LDPE prices (the red line) have moved up quite sharply since June. But almost all of this improvement has been captured by cracker operators. Margins for integrated players (in yellow) recovered quite nicely, but […]

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’2009 – another difficult year’ says BMW

BMW, the world’s largest luxury car manufacturer, warned today that it is no longer immune from the global downturn: ‘Business conditions for the automobile industry deteriorated sharply again in the second quarter due to further ongoing steep rises in oil and raw material prices, the weakness of the US dollar, the impact of the international […]

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Revisions, revisions

Statisticians love re-writing economic history. And a notable example of this has occurred today. US government statisticians reported that the US economy actually declined by 0.2% at the end of last year. Whereas, 6 months ago, they reported it as having grown by 0.6%. Few readers of this blog will be too surprised. Earlier this […]

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US housing ‘terrible’

When a leading banker says things look ‘terrible’, one know they must be really bad. Jamie Dimon is CEO of JP Morgan Chase, the only major US bank not to take write-downs on its housing loans to date. He described the US housing market as follows: ‘We saw subprime go first, then you see home […]

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Just saying ‘No’

I noted back in February that US banks were tightening lending standards into the housing sector. Now they are doing the same with business loans. The New York Times reports today that businesses around the country are finding it more difficult to borrow. As a result, companies that depend on bank financing are having to […]

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The cost of Asian subsidies

The Asian Development Bank (ADB) says Asian governments ‘are caught in the pincer grips of slowing growth and rising inflation’. Whilst the cost of subsidies is ballooning. India, for example, will spend $42.5bn in oil subsidies this year, ‘six times the entire education budget’. As the ADB notes, `increased food and energy subsidies erode fiscal […]

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The end of ‘stretch targets’

There is little doubt that chemical growth is weakening. The above chart, taken from Kevin Swift’s excellent weekly report for the American Chemistry Council, indicates that a serious downturn is underway.

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Germany’s growth slows

Germany is the powerhouse economy of Europe. Its also a late-cycle economy, relying more on engineering and equipment sales than consumer spending. So until recently, its growth has seemingly not been affected by the global slowdown. But Germany’s Chancellor, Angela Merkel, indicated yesterday that a ‘significant fall’ was likely in economic growth next year. Industrial […]

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European auto sales fall 8%

Europe is the world’s largest auto manufacturer, accounting for 32% of the global market. So news that European auto sales fell 8.3% last month, compared to 2007, is worrying. Italy’s sales fell 20%, and were today described as ‘disastrous’ by CEO Sergio Marchionne, who announced that 4 of their 6 plants will shut for 3 […]

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