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Benzene on the floor

Benzene is one of the most widely used, and widely traded, chemicals. It is therefore an excellent leading indicator of chemical industry supply/demand balances, and profitability. • A year ago, the blog noted that benzene prices had “hit a ceiling”, suggesting that industry profitability was close to a peak. • Then in October, when they […]

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IMF says advanced economies to “contract sharply”

The IMF and World Bank continue to play leap-frog in reducing their global growth forecasts. In January, the IMF forecast growth would come to a “virtual standstill”. Then, two weeks ago, the World Bank said the economy would “shrink” for the first time since World War 2. Today, the IMF joins the Bank in suggesting […]

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Anger replaces Denial, as financial crisis evolves

Human beings go through a number of stages when confronted by major change. As first described by Elisabeth Kübler Ross, the process starts with: • Denial that any change is taking place • Then anger at the implications of the change • Bargaining to reduce its magnitude • Depression as reality begins to be confronted […]

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Moody’s sees negative outlook for Asian petchems

Its not just the World Bank that is concerned about the outlook for East Asia. Today, Moody’s (the ratings agency) says it has a negative outlook for the petrochemical sector over the next 12-18 months. It concludes: • “In response to weakening global demand, Asia Pacific’s petrochemical companies are rapidly shedding inventory and delaying their […]

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G-20 plans still short on substance

The G20 represents over 85% of the world’s economy. And there is certainly no shortage of major issues for government leaders to discuss when the G20 meets next month in London. But the blog is not over-hopeful about their ability to make things happen. In November, the G20 promised “concrete policy outcomes” from its meetings. […]

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OPEC seeks to hold oil prices

OPEC Oil Ministers, meeting today, have achieved 80% compliance with their announced production quotas. This is much higher than normal, and owes a lot to the hard-ball tactics played by Saudi Arabia, the world’s leading oil producer, in initially allowing prices to slip to a $32/bbl low. The blog forecast in January that OPEC would […]

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Competitive devaluations begin

Last month, in discussing the ‘Cycle of Deflation’, the blog worried that “the risk is that we now see a round of competitive devaluations, as other countries also try to support their exports, and reduce import penetration”. On Thursday, the Swiss National Bank announced that the Swiss franc’s strength was “inappropriate” and said it would […]

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“Nobody there” at the US Treasury

The UK’s most senior civil servant, Sir Gus O’Donnell said yesterday that the UK government was struggling to organise next month’s G-20 meeting because of the “absolute madness” of the US system, whereby “a new administration had to hire new officials from scratch, leaving a decision-making vacuum”. O’Donnell added that “there is nobody there. You […]

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Dow pays $78.97/share for Rohm & Haas

The blog has always had enormous respect for Dow. This was due to their ability to manage unconventional risks, in a way that other chemical companies (such as the blog’s former employer, ICI), found impossible. Even when things went wrong, they always had a Plan B, which allowed them to exit on a sensible basis. […]

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Global economy to shrink in 2009

The world’s major financial institutions become more pessimistic each time they report on the economic outlook. 6 weeks ago, the blog noted that the IMF expected “the global economy to come to a virtual standstill in 2009″. Today, the World Bank is forecasting that “the global economy is likely to shrink this year for the […]

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