Untitled.png

Global chemical production down 4.4% in November

Global chemical production is now falling at an alarming rate, down over 4% in November, as core demand from housing/construction and auto markets collapses. Only the Middle East is now seeing positive growth year-on-year. As the chart shows (using ACC data): • N America is now down 12% • W Europe/C&E Europe are down over […]

Continue Reading
recession logo right.jpg

INEOS announce €1bn inventory loss in Q4

In early October, I forecast that we were about to revisit “the scariest moment of my 30 year chemical career”, adding that: “The moment the blog has long feared, and warned about, may be about to arrive. It appears that we may be about to revisit 1980, when for some weeks it seemed that demand […]

Continue Reading

Asian economies hit: US home starts slump

Asia is hard-hit by the downturn in the Western economy. Today, China said its Q4 GDP had grown just 6.8%, the slowest level since 2001. This led premier Wen Jiabao to say the outlook for jobs was “very grim”. It also increased speculation that China will devalue the renmimbi, which would increase trade tensions within […]

Continue Reading

INEOS, Georgia Gulf, Chemtura bond prices plunge

Bond markets are a good place to look if you want to understand the outlook for major companies in the chemical industry. A key market is in ‘credit default swaps’ (CDS), which offer insurance against the possibility that a company might default. The way they work is that the owner of a bond, or a […]

Continue Reading
Yangtze map right.jpg

Shanghai region slows

The Yangtze River Delta region (which includes Shanghai, Jiangsu and Zhejiang) accounted for 22% of China’s GDP in 2007. It is focused on exports to the USA and EU, and is a major centre for chemicals production. But now, like the Pearl River Delta, its economy is slowing fast. According to the China Daily, an […]

Continue Reading
IEA logo left.jpg

IEA revises down oil demand

The International Energy Agency (IEA) has cut its estimate of expected global GDP growth in 2009 to just 1.2%. It therefore expects the world to record its first back-to-back annual decline in oil demand since 1982/3. It says oil production last month was unchanged at 86.2mbd, despite OPEC cutbacks and the first fall in Russian […]

Continue Reading
Kaka right.jpg

Middle East liquidity dries up

In the soccer world, the UAE has been making headlines this week. It is proposing to fund the first-ever £100m ($150m) transfer – of the Brazilian player, Kaka, to Manchester City. But behind the scenes, the collapse of the oil price has been playing havoc with the economies of the Gulf countries (GCC). HSBC, for […]

Continue Reading

Moody’s worries about the chemical industry

Moody’s, the global ratings agency, is today forecasting a 70% chance of a U-shaped recession, and a 15% chance of either a V or L-shaped downturn. This broadly agrees with the blog’s own view, set out a month ago. Moody’s also singles out the chemical industry as being one of those most at risk from […]

Continue Reading
Eurozone right.jpg

Eurozone under pressure

Early last year, the blog flagged up a warning from Gillian Tett in the Financial Times that Iceland could go bankrupt, as its banks were “too big to rescue”. Yet at the time, the United Nations had listed it as having “the highest standard of living of any country” in the world. Unfortunately, however, Iceland’s […]

Continue Reading
Dow right.jpg

Dow’s debt ratings cut – could hit junk status

Over the last few weeks, INEOS had to scramble to get a covenant waiver from its lenders, and Lyondell went into Chapter 11. Now Dow’s debt is facing a potential cut to junk status from the main ratings agencies. Dow’s rating has already been cut, following the collapse of the K-Dow deal with Kuwait. And […]

Continue Reading