One of the oldest rules in investment is that ‘When a good management finds itself running a bad business, its the reputation of the business that survives’. Legendary US investor Kirk Kerkorian has just proved he is no exception. Back in April, he spent $1bn on buying a 6.3% stake in Ford Motor Co, and […]
China was the first major country to recognise the need for economic restructuring, back in August. Today, the State Council announced further details of its plans, as Q3 GDP growth slowed to 9%. Agriculture and rural development are now the key priorities. This builds on the recent Communist Party decision, described as being of “historic […]
We now have an possible indication of how far house prices may have to fall in some parts of the USA, in order to attract buyers. Last month, Southern California saw a 65% rise in property sales versus September 2007. The reason, a major increase in foreclosed properties for sale. The impact on prices was […]
As the blog noted earlier this month, everyone looks to the majors for guidance during difficult times. It therefore welcomes today’s comments from SABICs CEO, Mohamed Al-Mady, when announcing their Q3 results. SABIC are probably the strongest petchem producer in the world, with experienced management and access to advantaged cost feedstocks. Al-Mady confirmed that SABIC […]
Futures markets are taking an increasingly gloomy view of oil demand. And over the past 2 weeks, the volume of NYMEX contracts to sell crude at $50/bbl has soared 50-fold. But so far, as the blog expected, physical prices have stabilised at the $70/bbl level in advance of OPEC’s emergency meeting on Friday. Current OPEC […]
The blog prefers to be optimistic. But 30 years in the chemical industry has taught it to be extremely realistic. So its motto for 2009 Budgets is ‘batten down the hatches’. Chemical companies are likely to be sailing in some very rough seas, with treacherous currents and plenty of dangerous rocks. Survival, not growth, is […]
Today sees a supportive follow-up in the Financial Times to yesterday’s posting about LloydsTSB, and its willingness to rebuff those who parroted the ‘shareholder value’ mantra. The man who led the bank’s director development programme reveals that its former Chairman, Sir Brian Pitman, ‘drummed into us that the board’s main focus was to ensure continuing […]
Events have moved quickly in oil markets in recent days. Last week, when oil was at $80/bbl, the blog argued that OPEC risked having to defend a $50/bbl price, by delaying production cuts until its 18 November meeting. Last night, OPEC signalled it agreed with this analysis, announcing that the meeting would now take place […]
Asian naphtha spreads versus crude oil have fallen to all-time lows. Dubai crude was reported at c$80/bbl last week, whilst naphtha was $30/bbl lower, at a price of only $50/bbl. This shows an extreme lack of demand for naphtha, and hence for petrochemicals. In turn, this is a leading indicator of economic downturn. ICIS news […]
On Monday, governments announced c$3.5 trillion of recapitalisation and capital injection into the global banking system. One would have then expected the major investment institutions to rally round in support. But on Wednesday, they conspicuously failed to do this. Instead they argued that the taxpayer should provide yet more money, in the form of dividends […]
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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.