Car sales are of major importance to the chemical industry. The ACC calculates each new car uses $2441 worth of chemistry. The declines reported below for March and Q1 do not, therefore, make pretty reading. March Q1 GM -13% -11% Toyota -3% -4% Ford -14% -9% Chrysler -19% -16% Even more discouraging is that none […]
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The IMF now sees a 25% chance of a world recession this year, in which global growth would fall below 3%. Its base forecast is just 3.7%, compared to 5.2% before the credit crunch began. Sales growth for most chemicals is tied to GDP growth, so companies should expect volumes to come under pressure as […]
China is well worth watching at the moment. Quietly, away from the headlines, the Shanghai stock exchange has been collapsing. It is now down 44% since its October peak, and fell over 5% on Wednesday. This matters to the chemical industry for two reasons: • The immediate cause of Wednesday’s fall was news that Sinopec […]
After 5 months, ExxonMobil is once again the world’s largest company by market capitalisation. PetroChina had overtaken it last November, but has since lost half its value in China’s stock market decline. Today, PC is worth $453bn, versus EM’s $455bn. China’s stock market has lost 25% so far this year. But PC has been particularly […]
Volatility has been rising in the crude oil and feedstocks markets. This is because individual players have completely different strategies. In turn, this makes it difficult for chemical companies to forecast short-term feedstock costs. It also makes it difficult to maintain margins. Last Monday, crude reached a new high of $111/bbl. Then, as the scale […]
Benzene prices may be about to tell us something quite important about future profitability trends for the chemical industry. As the chart shows, benzene has hit a price ceiling at around $1200/t over the past 4 years in European markets. Yet crude has been climbing, from an average $38/bbl in 2004 to average $95/bbl so […]
The Financial Times this morning reports that the US Fed fears that ‘the economic downturn in the US could turn into a deep and protracted recession of the kind that plagued Japan’. Clearly based on interviews with senior Fed officials and other policymakers, the two articles (one for the European edition, and one for the […]
The US$ had now fallen through the ¥102 level, which has held since 1995, and went straight to the psychologically important ¥100 level. The dollar peaked 9 months ago at ¥124, and so it has now fallen 19%. This is dramatic by any standards. I forecast back in November that an ‘old-fashioned currency crisis’ could […]
China announced yesterday that inflation had soared again last month, reaching 8.7%, versus the government target of 4.8%. Part of the increase is clearly due to the effects of recent major storms. But with the US Fed likely to cut rates soon, China remains in a difficult position. If it increases interest rates, then the […]
Central bankers are slowly recognising that inflation is becoming a serious problem. But their responses differ. So chemical companies will find it harder to predict interest and exchange rate policies.
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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.