Very few non-OPEC oil projects have been financed in recent years, although market prices have risen from $20/bbl to $100/bbl. This is because oil companies and banks assumed that current prices would fall back to $40/bbl, or even lower, within 3 – 5 years. But a new reality has been dawning, summed up by Total’s […]
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Chemical companies tend to trade on ‘open book’ terms with long-established customers. They are also supportive when those customers are facing problems in their end-markets. In a recession, these admirable qualities can become expensive. ICIS news reports tonight that the bankruptcy of Plastech Engineered Products in the US has led to debts of nearly $5m […]
OPEC’s decision to hold its production quota at last Friday’s meeting came as no surprise to the markets, which were busy taking prices down $2/bbl on renewed fears of a US recession. But it did produce a warning from the International Energy Agency (IEA) that OPEC’s policies ‘threaten the strength of the global economy’. The […]
China’s ethylene and propylene imports have surged in recent months, as the country has diverted naphtha to supply gasoline and diesel needs. ICIS news, reporting official China Customs figures, says 2007 ethylene imports were over 400% higher at 510KT, versus just 117KT in 2006. Ethylene exports also more than halved to 50KT in 2007, from […]
CEOs seem to be following CFOs in worrying about the impact of the credit crunch and debt crisis. The annual CEO survey by PwC of 1150 executives shows that fears of a downturn now top their list of concerns. US CEOs are much less confident than a year ago, with only 35% now ‘very confident’ […]
The new ICIS Weekly Margin report on polyethylene is a goldmine for those who want to track the fortunes of the petchem industry. The recent issue contains good news and bad news for producers: • The good news is that PE margins have improved during January for integrated producers as a result of lower feedstock […]
I had the opportunity last night to learn current thinking within the oil industry on the current outlook for oil markets, by attending the annual lecture of the British Institute of Energy Economists, kindly hosted by BP. A year ago, at the same event, the crude price was $51/bbl. Last night, the headlines were ‘major […]
I have often wondered how the major investment banks arrive at their forecasts for long-term crude prices. Last night I found out how it is done at the biggest player, Barclays Capital. Dr Paul Horsnell, Head of Commodities Research, said that when he started in the role in 2003, he began by keeping close to […]
Reports from leading retailers such as Wal-Mart and Tesco provide the best real-time insight into what is really happening in the wider economy. It is clear from both companies’ recent results that US and some other western consumer markets are slowing very quickly. This has critical implications for chemical companies. In the US, Wal-Mart see […]
Financial investors are already quite disruptive in crude oil markets. And their influence is set to grow this year. That’s the message from surveys by Barclays Global Investors and JP Morgan. $120bn is now invested in commodities as a class, with oil a major target. Even your own pension fund may be about to invest, […]
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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.