The US price for natural gas has risen faster than crude so far this year. It is already up almost 65%. Rising coal and oil prices have encouraged power generators to switch to gas, whilst lower Canadian exports and a tight global LNG market have helped to push prices higher. Increasing demand for ethanol will […]
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Central bankers had it easy over the past decade. Now they are going to have to earn their money. Inflation is rising rapidly, and growth rates are falling. But unfortunately, as I first noted back in March, they still seem to have differing ideas about what policies will best counter these twin challenges.
US economic conditions are ‘ominous”, and may worsen into 2009, according to Dow CEO, Andrew Liveris. “A month ago we might have said … the US slowdown could be bottoming, but I don’t think it is bottoming,” Liveris said in response to analysts’ questions at an investor conference in New York. He added that “I […]
Yesterday’s action in financial markets reminded me of the Bird/Fortune video (noted here in December), where they took a satirical look at the causes of the sub-prime debacle. Specifically, the question in the interview where Fortune describes Bird as a ‘sophisticated investment banker, with his fingers right on the pulse’. The moment that recalled this […]
The blog doesn’t often comment on management issues. But one interesting article has caught my eye today. A major study reported in the Financial Times suggests that ‘leadership teams were four times as important as leaders in the process of developing strategy’. And it quotes Lee Scott, Wal-Mart’s CEO as saying that ‘I don’t run […]
Some minor relief may be at hand for hard-pressed cracker operators, particularly those in Asia. Sinopec announced today that it will reduce ethylene output by 65 KT in June (the equivalent of 1 cracker’s output), in order to allow it to boost fuel production by 200 KT. This will be done by bringing forward planned […]
Dow today announced that it is raising prices for ‘all of its products by up to 20 percent – depending on their exposure to rising energy, feedstock and transportation costs – and will review all terms to all customers’. Dow CEO, Andrew Liveris, said that Dow’s ‘first quarter feedstock and energy bill leapt a staggering […]
Sinopec is now losing 3000 yuan ($425) on every tonne of oil product sold, due to China’s price freeze, according to Sinopec spokesman Chen Ge yesterday. And this is on top of official government subsidies paid to Sinopec, which rocketed to $1bn in April. This was more that the entire subsidy paid in 2007. And […]
The excellent ‘ICIS Weekly Margin Report – PE’ is starting to tell a very sad story about polymer margins. The chart (above) shows that the ethylene margin, in yellow, has been falling steadily since the start of the year. The same is true for the HDPE margin, in blue. And the Report notes that if […]
There are some close parallels between the airline and chemical industries. Both are very capital intensive, use oil as a key raw material, and are heavily dependent on operating rates as a driver of profitability. Therefore one probably needs to pay close attention to news that American, historically the strongest US airline, has announced it […]
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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.