About Paul Hodges

Paul 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

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China’s oil imports not driven by domestic demand

A key driver for the rally in crude oil markets has been the increase in China’s demand. The assumption has been that this confirms economic growth is recovering strongly. Crude oil imports have certainly been rising since Q1, and have recently averaged 500kbpd more than 2008. Refinery runs have also been higher. However, new analysis […]

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Insolvent US banks can’t lend

Many US policymakers are still in denial about the underlying causes of the downturn. They argue it is due to a lack of liquidity, and are thus encouraging ‘hot money’ to flood into financial markets. But the new ‘bubbles’ created by this wishful thinking, such as today’s $80/bbl oil prices, are making the underlying problem […]

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US unemployment rate now 10.2%

The US accounts for 23% of global GDP. Its economy is 3 times larger than the No 2 country, Japan. And most critically for the chemical industry, 70% of US GDP is consumer-based. Developments in US housing/construction, auto and electronics industries are therefore the biggest single influence on global chemical sales. In turn, the level […]

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Webinar recording now available

If you missed the blog’s recent webinar, Simon Robinson (ICIS online editor) has kindly posted a recording of it. To access this, you just need to join the new ICIS Chemicals and the Economy Group by clicking here.

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UK downturn follows the 1930/34 path

Politicians and analysts often focus on selling dreams. Otherwise, we might not be tempted to buy their promises of better times ahead. But those running businesses have to remain realistic. BASF’s CEO, Jurgen Hambrecht, did exactly that in his comments on the outlook. And the above chart, from the UK’s National Institute of Economic and […]

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Insights from LyondellBasell and BASF

Recent comments from LyondellBasell’s COO, and BASF’s CEO, seem worth highlighting as we come to the end of the results season. Ed Dineen noted that China’s polyethylene demand seems partly linked to changes in crude oil pricing, “It turned down somewhat as we saw crude retreat a little, but as crude turned back up toward […]

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US auto sales enter the “new normal”

The blog is changing its US auto sales chart, now that a year has passed since volumes collapsed last October. Year-on-year % changes become meaningless as a result. Instead, it will now show monthly volumes, on a total US basis (blue line) and for the major producers (dotted lines). Key highlights this month are: • […]

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China’s economic “bubble” continues to deflate

This year’s speculative boom in China’s economy, created by major government lending and stimulus programmes, now seems to be ending. The evidence for this is in the above chart, showing LLDPE futures trading on the Dalian exchange. This hit 80 million tonnes (MT) in April, versus total global output for this type of polyethylene of […]

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Buy on the rumour, sell on the news

“Buy on the rumour, sell on the news” is the classic indication of a weak market. A lack of follow-through buying reveals that market action is not supported by fundamentals, but only by sentiment and momentum. Friday’s 2.8% fall on the US S&P 500, in reaction to Thursday’s positive US GDP number, was therefore a […]

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Companies remain cautious on the outlook

The good news is that the stabilisation seen in Q2 has been maintained. But companies remain cautious on the outlook, to judge from Q3 reports. CEOs are sceptical about the impact of government stimulus efforts in the West, and fear demand will fall back as these end. The only optimists are in China and India. […]

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