China has been a major beneficiary of the globalisation movement in recent years. In turn, it has become a tremendous importer of most chemicals. It accounts for up to 50% of total demand for many Asian chemical producers, and is a critical factor in most supply/demand balances. This position was already changing, however, as China […]
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
Sweden is an influential adviser on credit crunch issues. This is because of the lessons it learned during its own major banking collapse in the early 1990′s, which has close parallels with today’s global crisis. Its central bank argues that the main risk now facing the world is deflation, not inflation. It points to the […]
Employment in the US auto industry has already halved since 2000, to less than 500,000. Now, with major restructuring underway, suppliers of plastics components are looking around for other markets. One current success story, identified by the Wall Street Journal, is WJG Enterprise in Michigan. A 55-employee company, it was 100% oriented to auto parts […]
Markets are driven by two factors, sentiment and fundamentals. Fundamentals can be followed by analysing hard data. In chemical markets, for example, key areas include new housing starts, auto sales, industrial production, Asian exports, etc. This data can also be used to make forward projections. However, sentiment is equally important, as it tells us what […]
The European soccer transfer market is a good example of a market where sentiment often outweighs fundamentals. Research by London’s Cass Business School shows that transfer fees have only a 16% correlation with success on the pitch. They found that salaries were the key driver, accounting for 92% of variation in league position. Spain’s Real […]
For the past 40 years, the aromatics industry has usually had to ‘bid away’ its feedstock from the octane and gasoline pool. The only exception took place in S Korea during the early 1990′s, when local gasoline demand was low. This gave the new S Korean paraxylene (PX) producers the lowest cost base in the […]
Vitol are one of the world’s largest oil traders. Thus the blog was interested to see their CEO, Ian Taylor, suggesting that the recent rise in oil prices “does not sit comfortably with the currently available supply and demand data”. According to ICIS news, Taylor went on to note: • Oil demand fell 3m bbl/day […]
Margins and volumes are under enormous pressure in most chemical markets. And as noted in the 2009 Outlook, companies need to develop an imaginative response to the pricing issues that they face. They also need to maintain faith in the future by continuing to innovate. Thus the blog was pleased to be invited to Dow […]
The US unemployment rate is now at its second highest level since records began in 1948. It was only higher in the early 1980′s, at 10.9% in December 1982. It rose last month to 9.4%, and is now above the May 1975 peak of 9%. The only positive sign is that the pace of job […]
Picture: www.businessoffashion.com A senior figure in the investment community told the blog recently that companies’ views on the outlook for the economy seemed to vary according to their own financial position: “the stronger the balance sheet, the more realistic (and worse) the view on the economy”. This analysis was confirmed at an interesting M&A Round […]
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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.