“There are 64.5 million empty apartments and houses in China’s urban areas“, according to Barrons, the US investment magazine. The figure comes from a survey of the country’s electricity meters, undertaken by China’s Academy of Social Sciences. To date, China’s homebuyers remain convinced that home prices cannot fall, as shown by their willingness last year […]
Tag Archives | China
Over-capacity is going to be a major issue for the petchem industry over the next few years. Asian producers, in particular, are likely to be worst impacted. The reason is that they have relied on exports to China taking up to 50% of their production. But now China’s own production is ramping up, reducing the […]
China’s chemical demand is clearly starting to slow, as my fellow blogger John Richardson has been reporting recently. This has big implications for the global chemical industry, which has relied on China to balance declining sales in the West. The slowdown comes as the government rolls back the stimulus measures introduced in Q4 2008, when […]
The business climate for Western firms in China is getting worse. 2 weeks ago, the CEO of General Electric, Jeffrey Immelt, caused a stir when he told a private dinner that “I really worry about China. I am not sure that in the end they want any of us to win, or any of us […]
Two months ago, on 8 May, the blog suggested that ‘Sell in May and Go Away” was likely to prove good advice this year. Since then, most major stock markets have fallen dramatically, with the S&P 500 down by 9%. The proximate cause of the blog’s pessimism then was the onset of the Greek/eurozone crisis. […]
When things are going well, potential problem areas get brushed under the carpet. Its only when the economy gets difficult, that tensions surface. Comments by General Electric CEO, Jeffrey Immelt, reported today by the Financial Times, are therefore a worrying sign of the uncertainty at the top of leading global businesses about the economic outlook. […]
The Baltic Dry Index of freight costs (for iron ore, grains and coal) follows changes in global demand for bulk shipping. As such, it is an important leading indicator of future economic activity, and chemicals demand. The blog first noted Index movements in October 2007, when this was accurately forecasting the H1 2008 boom. In […]
China’s petchem volume surge will hit imports, as electricity consumption/bank lending data shows economy’s growth starting to slow
The above chart is the blog’s best effort to correlate the change in China’s bank lending with the real economy. It shows electricity consumption (blue line) and lending (red column) since July 2008. Electricity consumption is an excellent proxy for the real economy, and probably more reliable than GDP figures, which are widely believed to […]
China is a very difficult country for foreigners to understand. The blog suspects that the best approach is to apply Winston Churchill’s insight on Russia, namely “I cannot forecast to you the action of Russia. It is a riddle, wrapped in a mystery, inside an enigma; but perhaps there is a key. That key is […]
A month ago, Nigel Davis called attention in his ICIS Insight column to the alarming fall taking place in US ethylene values. He noted that “inventories seem to have filled“, and presciently concluded that “buyers have been on the look-out for the turn and, by all accounts, expect any downward movement to be swift and […]
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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.