If you want a loan, go to China. That’s the message from the chart, courtesy of Credit Suisse, which shows the staggering growth in bank lending since the start of the year. Now, even the People’s Bank of China is starting to get concerned. Lending so far this year has reached $1trn, equal to a […]
Source: Wall Street Journal Everybody’s favourite Christmas film is ‘Its a Wonderful Life’, in which the hero rescues a failing US bank during the Depression. But until today, the blog had never realised that a major role model for the plot-line came from Chicago in 1932. Nouriel Roubini’s blog notes that the city saw the […]
Sometimes, the blog gets lucky with its timing. A week ago, it wrote bearishly on crude oil markets, and suggested that “chemical companies need to keep a close eye on changing sentiment in financial markets”. By Friday, oil prices had tumbled 11%, as the US S&P 500 index continued to weaken from its 12 June […]
After yesterday’s post, Edwin Pang of Credit Suisse in Hong Kong has raised an interesting question over the likely rationale for China’s massive increase in petchem imports, such as polyethylene (PE), in 2009. As the chart shows, its monthly PE demand (production plus net imports), was very steady in 2007-8. It averaged 980kt in 2007, […]
Q2 saw an outburst of speculative frenzy all around the world, and in a wide variety of financial markets. China’s Dalian futures market saw LLDPE volume soar to 80 million tonnes – around 4 times total annual world demand. China’s easy money policy meant it was easy to borrow to speculate on a quick recovery. […]
The chemical industry has benefited from a benign paradigm over the past 25 years: • Demographics in the west have encouraged consumption, as the baby-boom generation reached middle age • Globalisation meant this could be achieved at lower cost, by outsourcing production to lower-wage countries in the east • Workers in the east saved their […]
Crude oil markets have risen 60% in recent months, as traders speculate on a quick V-shaped economic recovery. But there are growing signs that reality, in the shape of evidence of falling US and global oil demand, may be about to reassert itself. Latest US statistics remain very negative: • Total oil product demand is […]
The good news from the latest reports on US house prices and auto sales was simple – things have stopped getting worse. US house prices saw “some stabilisation in some regions” according to the S&P/Case Shiller Index for April. Whilst auto sales are clearly bouncing along the bottom, down “only” 29% in June versus May’s […]
Capacity closures are always hard to achieve in the petchem industry: • First, these are a ‘zero sum game’ – if I shut my plant, then other producers gain in terms of overall operating rates and margins, at my expense • Secondly, there is the integration issue. Closing a consuming plant also impacts output from […]
Last month, the blog introduced its new Boom/Gloom Index, designed to track sentiment in financial markets. The chart above now updates it to reflect the whole of June. The Index has continued to move up, and is close to the levels last seen in October 2007. Equally remarkable is the performance of the Green Shoots […]
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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 as 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.