China’s leadership seems to be increasingly confident about its ability to redirect the economy towards more domestic consumption over time, and away from the previous over-reliance on exports. As the above chart shows, bank lending (red column) is well on track to meet the $1.1trn target set for 2010, down 21% from 2009’s high. In […]
Chemicals and the Economy
EU auto sales suffer “continued downward trend”
ICIS’ Mark Victory wrote a interesting article this week, in which he tried to relate differing views of the economic outlook to auto demand, the area in which he specialises. The underlying issue, of course, is the complexity of the value chain, where supplies are often ordered months in advance, whilst most data will only […]
Dalian follows oil, interest rate, speculation
The past fortnight has confirmed the strong linkage between Dalian futures trading, and financial market speculation. Dalian prices (red line) for linear low density polyethylene (LLDPE) rose steadily in early September, as traders bet on higher crude prices. They had gained RMB 600/t ($90) by last Wednesday. But then rumours began flying that China’s interest […]
Saudi Aramco to extend shale gas search
The summer has seen several reports of reductions in ethane availability to Saudi petchem plants. This seems to have been due to two causes: • Saudi has cut back oil production by a third (4mbd) in order to comply with its 8.3mbd OPEC quota at a time of reduced global demand. This has also reduced […]
Capex spending falls as profits drop
The ICIS Top 100 listing of the world’s major chemical companies has just been published, and provides its usual store of data and insight. In his summary, editor Nigel Davis notes that 16 of the Top 100 reported a net loss in 2009, with LyondellBasell, PEMEX and INEOS the largest at $2.9bn, $1.5bn and $0.9bn […]
Demographics boosted demand, now drives savings
The blog is very pleased to have been invited to write for today’s Financial Times. Its article looks at the influence of the Western ‘baby-boom generation’, born between 1946-70. Typically, as in the UK, the period saw a 25% jump in the number of births compared to pre-War levels. Since 1970, births have fallen back […]
Global markets decoupled over past 6 months
The blog’s 6 monthly survey of major stock markets, now including the US 30 year Treasury bond, shows mixed performance since March: • The worst performers have been Shanghai and Tokyo, down ~12%. They are also the worst performers since the pre-Crisis peak, down ~50%. • In the middle are the US, UK, Russia and […]
Oil prices in longest-ever period of contango
Oil markets are now in their longest-ever period of contango. This is when prices for future months are higher than current levels. According to Bloomberg, they have now been in contango for a record 656 days. Keeping a barrel of crude in a tank on land costs 60 – 70 US cents/month, whilst hiring a […]
“Impatience can ruin a whole life”
Anyone running a chemical company knows that the benefits of certain key decisions can take years to develop. Many companies had to support their nascent pharma businesses for 20 years, before steady profits began to flow. Whilst major complexes can easily take 10 years from inception to completion. Yet in recent years, investors have become […]
Washington and Bahrain dates for the blog
The blog is delighted to have been invited to address two important industry events in coming months: Washington DC. It will be presenting a Global Outlook to the Coatings Summit, alongside CEOs including Andrew Liveris of Dow Chemical; Christopher Connor of Sherwin Williams; Hans Wijers, AkzoNobel; Kenji Sakai of Nippon Paint, as well as senior […]
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