The chemical industry is always a leading indicator of the global economy. One of the blog’s oldest friends used to be a central banker, and he made no secret of the fact that our discussions about demand levels were often an important factor in his overall analysis. So it is no great surprise that the […]
The great wave of destocking is finally coming to an end. And it is clear that underlying global demand is well below previous “normal” levels. The evidence for this can be seen in the above chart, based on American Chemistry Council data, which shows global chemical production down 12.8% in April versus 2008. And as […]
The blog’s close eye on Scotland’s media has again been rewarded this morning, as ‘The Scotsman’ reveals that Ineos have appointed Morgan Stanley, the investment bank, to advise on the sale of Grangemouth. It suggests that a company such as “PetroChina could buy the refinery, while Ineos would retain the polymer and petro-chemical processing plants […]
The ‘Falkirk Herald’, based close to Ineos’s Grangemouth facility in Scotland, is not normally the place that the blog would look for news of the potential sale of a major part of the world’s 4th largest chemical company. However, that is what happened today, when the ‘Herald’ reported that Grangemouth site manager Gordon Grant had […]
China has been a major beneficiary of the globalisation movement in recent years. In turn, it has become a tremendous importer of most chemicals. It accounts for up to 50% of total demand for many Asian chemical producers, and is a critical factor in most supply/demand balances. This position was already changing, however, as China […]
Sweden is an influential adviser on credit crunch issues. This is because of the lessons it learned during its own major banking collapse in the early 1990′s, which has close parallels with today’s global crisis. Its central bank argues that the main risk now facing the world is deflation, not inflation. It points to the […]
Employment in the US auto industry has already halved since 2000, to less than 500,000. Now, with major restructuring underway, suppliers of plastics components are looking around for other markets. One current success story, identified by the Wall Street Journal, is WJG Enterprise in Michigan. A 55-employee company, it was 100% oriented to auto parts […]
Markets are driven by two factors, sentiment and fundamentals. Fundamentals can be followed by analysing hard data. In chemical markets, for example, key areas include new housing starts, auto sales, industrial production, Asian exports, etc. This data can also be used to make forward projections. However, sentiment is equally important, as it tells us what […]
The European soccer transfer market is a good example of a market where sentiment often outweighs fundamentals. Research by London’s Cass Business School shows that transfer fees have only a 16% correlation with success on the pitch. They found that salaries were the key driver, accounting for 92% of variation in league position. Spain’s Real […]
For the past 40 years, the aromatics industry has usually had to ‘bid away’ its feedstock from the octane and gasoline pool. The only exception took place in S Korea during the early 1990′s, when local gasoline demand was low. This gave the new S Korean paraxylene (PX) producers the lowest cost base in the […]
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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.