Chemical markets are traditionally 6 months ahead of the wider economy, as they are so focused on consumer demand. September may therefore provide a ‘moment of truth’ for the IeC Downturn Alert, launched in April: • The petchems downturn since April may now become apparent in the wider economy • Alternatively, demand may recover strongly, […]
Tag Archives | Brent
The blog was almost alone at the end of April, when it launched the IeC Downturn Alert. Today, its fear that we are close to a global downturn has become mainstream. As the American Chemistry Council report, “fears of another global recession are rising with several noted forecasters raising the chances of another recession to […]
On Friday, the US government announced that GDP grew just 0.8% in H1. This, of course, was far below the US Federal Reserve’s confident estimate of 3.5-4% for 2011, given only 4 months ago in March. We are indeed in a New Normal. But the consensus simply refuses to recognise the impact on demand of […]
The IeC Downturn Alert launched on 2 May. Later that day, the US S&P 500 – the world’s most important stock index – hit a post-Crisis high of 1370. Last Friday, it closed down 7% at 1268 (purple dotted line above). Many expect this to be just a minor correction, and still believe a new […]
Buyers’ behaviour has changed completely since the IeC Downturn Alert launched 7 weeks ago. ICIS news reported Friday a large polypropylene consumer commenting: “I am not buying a lot, just one or two trucks at a time. I kept a high stock level when prices were going up, so now I am using that up. […]
When the blog launched its IeC Downturn Alert in early May, it noted that “they don’t ring bells at market turning points”. However, it hoped that the Alert would provide a replacement. It seems to be doing its job. As the chart above shows, prices for all the products highlighted are now down between 9% […]
It is now 4 weeks since the blog launched its IeC Downturn Alert. Since then, as the chart shows (based on ICIS pricing reports): • Brent (blue dotted line) is down 11% • Naphtha (red) is down 13% in Europe • Benzene (green) is down 9% in Europe • HDPE export (purple) is down 7% […]
The CEO of ExxonMobil, Rex Tillerson, has provided powerful support for the blog’s long-held view that oil prices are well out of line with fundamentals. He told the US Senate that: “If you said: ‘If I had access to the next marketable barrel, what would it cost?’, its going to be somewhere in the $60 […]
The aromatics market is a very liquid market compared to other chemical markets. It is an excellent leading indicator for industry pricing and volume trends, and forecast the current rally in April 2009. The chart above shows how Brent crude oil prices have moved since January 2009 (purple line), versus China’s prices for PTA (terephthalic […]
Something very strange has been happening to US energy prices over the past 2 years. The chart above shows the ratio between WTI crude oil pricing and natural gas: • It was between 6.0 and 13.0 for 22 years between 1986-2008, with some minor exceptions, and averaged 9.9. • Yet since January 2009, it has […]
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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.