The ICIS weekly margin reports continue to provide essential reading for anyone in the petrochemical value chain. The above chart is particularly fascinating, as it highlights the significant differences between cracker margins on a regional basis over the past 2 years: • Europe (red column) is the clear winner over the period. Its margin bottomed […]
Chemicals and the Economy
US households worry about incomes
The fascinating chart above from Dave Rosenberg at Gluskin Sieff confirms the blog’s fears above the impact of today’s high oil prices on US consumer spending. It shows that consumers in the world’s wealthiest econony have very low expectations for their real income. These are now at the 4th lowest level since the survey began. […]
China battles food and house price inflation
When China announced that inflation had reached 5.1% in November, the authorities insisted it was only a temporary peak. But this seems less likely today, with January’s inflation still at 4.9%. The surge in food prices is very worrying. They jumped 10.3%. And with a major drought underway in the North East, there is a […]
Housing markets remain uncertain
The blog’s special series this week has focused on housing in 3 key markets – the USA, UK and China. Housing is a core sector for chemical and polymer demand, and it has been particularly important over the past 30 years: • The Western BabyBoomers (those born between 1946-70) have been in the 25 – […]
China seeks ‘soft landing’ for house prices
Housing’s share of China’s GDP has tripled over the past decade to 6%. This, of course, has stimulated demand for chemical and polymers. But as the Bloomberg chart shows, it is also worryingly close (blue line) to the peaks seen in the USA (black line) and, before then, Japan (dotted line). The rise has been […]
UK house prices slip in H2
UK housing markets followed the US lead in recent decades. Conservative and Labour governments both shared a belief in extending property ownership as widely as possible. But what neither foresaw was the ‘unintended consequence’. Their policy of boosting home ownership coincided with the entry of the BabyBoom generation (those born between 1946-70) into the 25 […]
US heads towards New Normal for housing markets
Major changes are underway in Western housing markets. They are generational in nature, meaning that we are starting to see a New Normal develop in terms of future demand patterns for chemicals and polymers. The past 30 years have seen Western leaders committed to the concept of a ‘property-owning democracy’. Both US President Reagan and […]
Mubarak’s departure may weaken oil prices
History doesn’t repeat, but it sometimes rhymes. That was the insight of the famed American writer, Mark Twain. 2 weeks ago, this led the blog to highlight the similarities between the geo-political concerns then developing in Egypt, and the Israel/Iran stand-off which had marked the oil price peak in June 2008. We still cannot be […]
Super-fast computers lead financial markets under QE2
Super-fast computers continue to increase their role in financial markets. They first came into prominence in H2 2009, when the ‘correlation trade’ began. Their role is nothing to do with price discovery, the traditional market function. Instead, they trade on algorithms. Their aim is trade arbitrage opportunities between markets on a nano-second by nano-second basis. […]
New Normal workshop in Singapore on 24 February
The blog is excited to learn that there should be a good attendance for its first New Normal training Workshop in Singapore. This is being held in association with ICIS, on 24 February. The Workshop aims to provide a comprehensive understanding of the factors that will impact the petrochemical market over the next few years: […]
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