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European auto sales increase versus 2008

Any improvement in the troubled auto sector is extremely good news for the chemical industry, after the battering of the past few months. Thus the blog welcomes news, as the chart shows, that European sales increased 2.4% in June, the first rise for over a year. Government support for scrapping older cars has led the […]

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China’s bank lending soars

If you want a loan, go to China. That’s the message from the chart, courtesy of Credit Suisse, which shows the staggering growth in bank lending since the start of the year. Now, even the People’s Bank of China is starting to get concerned. Lending so far this year has reached $1trn, equal to a […]

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Crude oil prices tumble on S&P 500 weakness

Sometimes, the blog gets lucky with its timing. A week ago, it wrote bearishly on crude oil markets, and suggested that “chemical companies need to keep a close eye on changing sentiment in financial markets”. By Friday, oil prices had tumbled 11%, as the US S&P 500 index continued to weaken from its 12 June […]

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China’s petchem imports soar on oil price speculation

After yesterday’s post, Edwin Pang of Credit Suisse in Hong Kong has raised an interesting question over the likely rationale for China’s massive increase in petchem imports, such as polyethylene (PE), in 2009. As the chart shows, its monthly PE demand (production plus net imports), was very steady in 2007-8. It averaged 980kt in 2007, […]

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Global downsizing needed to rebalance supply and demand

The chemical industry has benefited from a benign paradigm over the past 25 years: • Demographics in the west have encouraged consumption, as the baby-boom generation reached middle age • Globalisation meant this could be achieved at lower cost, by outsourcing production to lower-wage countries in the east • Workers in the east saved their […]

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US demand bouncing along the bottom

The good news from the latest reports on US house prices and auto sales was simple – things have stopped getting worse. US house prices saw “some stabilisation in some regions” according to the S&P/Case Shiller Index for April. Whilst auto sales are clearly bouncing along the bottom, down “only” 29% in June versus May’s […]

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Dow aligns US ethylene balances

Capacity closures are always hard to achieve in the petchem industry: • First, these are a ‘zero sum game’ – if I shut my plant, then other producers gain in terms of overall operating rates and margins, at my expense • Secondly, there is the integration issue. Closing a consuming plant also impacts output from […]

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Boom/Gloom Index rally continues

Last month, the blog introduced its new Boom/Gloom Index, designed to track sentiment in financial markets. The chart above now updates it to reflect the whole of June. The Index has continued to move up, and is close to the levels last seen in October 2007. Equally remarkable is the performance of the Green Shoots […]

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