The above chart is a major wake-up call for anyone who still believes that China will continue to import ever-increasing volumes of major commodities such as polyethylene (PE). It suggests demand and import growth are now at much lower levels than in the past, and may even have begun to peak. The chart shows cumulative volumes in […]
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Sinopec, China’s largest chemical company, has just published its operating results for 2014. We don’t yet have all the details, but the chart above highlights the key points of its cumulative performance since it first filed public accounts in 1998: It has invested Rmb 288bn ($41bn) in capital expenditure for refining, and Rmb 239bn ($33bn) for chemicals (blue columns) […]
Today’s market conditions are some of the most dangerous that I can ever remember. Of course, markets are always unpredictable. As UK prime minister Harold MacMillan noted in the 1960s, when asked what kept him awake at nights. “Events, dear boy, events”. But today’s markets have a 3-dimensional unpredictability: They have the normal issue of trying to understand fundamental levels […]
Chemical production is a time-proven leading indicator for the global economy. And as the chart above shows, it has been signalling that a downturn is underway since April. Based on American Chemistry Council data, it highlights: Global growth peaked at 5% in April and was down to 3.3% in January (black line) Only the N American […]
European chloralkali producers ended up having a relatively good year in 2014, despite having been over-optimistic about likely demand levels in Q3. They held operating rates at 78% in Q3, in line with H1 levels. But realism soon prevailed, and producers quickly cut rates to average 75% in Q4 to compensate. The chart shows the detail of developments since 2009 (based […]
2013 wasn’t a good year for chemical plant reliability. As I noted a year ago, force majeures (when plants go offline unexpectedly) were close to a record level. Very worryingly, 2014 turns out to have been far worse as the chart above shows, based on the reports in ICIS news: 2014 saw a total of […]
It feels like the end of an era, as we survey the usual quarterly update of chemical company results. For several years, there have been 3 or 4 key dimensions: US companies have been very profitable due to shale gas Asian companies have done well with volume, due to Chinese demand Middle Eastern companies have done well due to […]
15 years ago, it was fashionable to dismiss eBusiness as a fairy story. I remember those days well, as I had just raised $25m from major companies to fund its development in the chemical industry. Today, of course, eBusiness is everywhere. Nobody would dream of shaking their heads and dismissing the whole concept, as many did pre-2000. Which takes […]
Exactly a year ago this week, the INEOS petrochemical business at Grangemouth in Scotland was facing closure. This would have been a disaster for the thousands of people employed directly and indirectly, as well as for Scotland. The blog was very closely involved in helping to achieve a successful outcome alongside the Scottish and UK governments, INEOS and the UNITE […]
We all know that the European economy is in a bad way. Sales and incomes are under pressure, and political risk is rising, whilst unemployment remains at high levels. Its very easy to get depressed about the outlook. We are also unlikely to get much help from policymakers. They remain in their world of mathematical models. These […]
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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 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.