There are increasing signs that China is getting serious about tightening its lending policies. The above chart, from China’s central bank, shows how lending has fallen since January. Then, it was 14% down versus 2009. But by the end of Q1, lending was down 43% versus Q1 2009. In addition, the government has begun to […]
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The dramatic rise of Asia’s economies, including China, has been based on an export-driven model. Their growth powered ahead as long as the West grew, and companies continued to outsource much of their basic manufacturing activity to lower-cost countries. In 2001, for example, China’s exports were just 20% of GDP. But by 2007, they had […]
The US consumer accounts for 16% of total global GDP, with a value of $10trn. By comparison, total Asian consumption is under $5trn. China’s consumption in 2008 was just $1.6trn, about equal to the UK. Changes in US consumer behaviour are therefore critical to global GDP, and hence to chemical demand. The chart above, from […]
The US 2009/Q4 reporting season is now virtually complete. It provides a valuable snapshot of company health as the US recession ends: • Reported earnings (red line) for the S&P 500 have recovered to $51. This is partly due to loss-makers such as GM having dropped out of the index due to bankruptcy. But it […]
China’s demand has been the main driver for the global chemical industry over the past year. And prices on China’s Dalian polymers futures exchange have been a key indicator of the boom. But now, the rally seems to be running out of steam. The key signs are in the above chart: • At the end […]
The blog is always grateful for good news, no matter the reason. Thus it welcomes March’s rise in US auto sales to 850k from February’s 615k (black line). The driver for the rise was Toyota’s (red line) record level of price discounts, as it aimed to overcome its disastrous sales slump after the quality problems. […]
The rate of unemployment is an important leading indicator for chemical industry demand. It measures the number of people who currently don’t have much spare cash to spend on discretionary purchases. And when the jobless rate is rising, it also impacts the spending patterns of those still in work, as they often choose to save […]
Prof Nouriel Roubini, one of the few to forecast the current Crisis, is very positive about the opportunities for growth in India over the next 20 years. Speaking in Mumbai, he argued that: • “While the economies of India and China are not large enough to lead global growth, emerging markets remain ‘bright spots’ compared […]
In December, the blog suggested that “2010 might see the industry return to its normal seasonal pattern, with a strong H1, followed by a slow Q3 holiday season, and then a final burst of activity in October/November before the Xmas break“. The chart above, from the excellent American Chemistry Council’s weekly report, provides welcome evidence […]
A remarkable thing happened this week in European olefin markets. Contract prices for butadiene and propylene were finalised for April/Q2 at higher levels than for ethylene. This has never happened before, in Europe or other regions. The chart, based on ICIS pricing data, shows how ethylene (blue line) has normally been the highest priced olefin. […]
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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.