China will pump loans worth $1.3trn into its economy this year, equal to 1/3rd of GDP. Equally, by tying the yuan to the US$, China has achieved a major devaluation against major currencies such as the euro. The result has been that China’s Q3 GDP rose less in “nominal” terms than in “real” terms. Normally […]
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The blog should award itself a pat on the back, now its May forecast of $80/bbl crude has come true. And it is pleased to maintain its 100% record in forecasting the direction and level of oil prices. But it still regrets the lack of substance behind the so-called ‘correlation trade’ between oil, the US$ […]
The blog’s new Budget Outlook is an independent view of the key issues which will impact chemical sales and margins in 2010. Previous Outlooks have stimulated much debate within the industry. We are therefore proposing to run a free 1 hour Webinar next week for blog readers, on Thursday 29 October at 15:00 GMT (16:00 […]
2010 should be a better year for the chemical industry, as demand grows in line with a recovery in global GDP. But a quick V-shaped return to the 2003-7 Boom years in terms of volumes/margins seems unlikely. Governments will worry about budget deficits, and may well scale down support for critical end-uses such as autos […]
In 2006, there were 2.2 million US housing starts. These were worth $35bn of chemical sales. Currently, and even with the support of an $8k tax credit, they are running at an annual rate of just 600k, worth $10bn. This is the lowest level since records began in 1960. Even in 1975, 1981 and 1981, […]
Sometimes a picture is worth 1000 words. The chart above, from the New York Times, highlights the massive changes that are taking place in world trade flows. These are of critical importance to the chemical industry, one of the world’s most globalised businesses. • Firstly, the volume of world trade has fallen to 2006 levels, […]
This being Budget Week in the blog, it seems appropriate to look at the views of Larry Summers, US economics chief, to understand his expectations for an economic recovery. His main concept is of “escape velocity”, whereby the economy will escape from the downturn like a 3-stage space rocket: • Government spending stops the downturn […]
The blog has argued for some time that the chemical industry is facing a “new normal” as growth returns to the economy. Now US Federal Reserve Governor Dan Tarullo has helpfully spelt out some important changes that he expects to occur. He notes that: • “Just about everyone understands we will never return to the […]
The blog is now preparing its annual Budget Outlook for 2010. Before this is published next weekend, it makes sense to assess the blog’s credibility by looking back at last year’s Outlook, to see how well it performed. Past performance may not be a perfect guide to future outcomes. But it is one of the […]
Coal miners used to take a canary with them, to help detect poisonous fumes. If the canary stopped singing, then they knew there was a problem. This led to the concept of “the canary in the coalmine acting as a warning of danger”. Small countries can play the same role in the global economy. Last […]
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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.