Q1 was a very strong quarter for Western companies operating at the upstream end of the chemicals value chain: • Plants were generally operating well, with few force majeures • Most importantly, the crude oil price jumped 20%. Many buyers had reduced inventory in December for working capital reasons. Then they found they had to […]
Chemicals and the Economy
3 major risks for 2011
There seems to be gathering concern in Germany about the outlook for 2011. This is very significant, as the economy has done well this year, and business confidence is at record levels. Bosch CEO, Franz Fehrenbach, who runs the world’s largest auto parts supplier, has warned that “the rebound in commodity prices will put intense […]
France, Germany, discuss EU fiscal union, as loan problems increase
The EU loans crisis began 6 months ago, when it became likely that Greece was never going to be able to repay its debts in full. Since then, Ireland has moved into a similar position. And there are expectations that Portugal and Spain will follow during 2011. Unsurprisingly, however, given the general lack of transparency […]
Budgeting for Uncertainty
When elephants fight, those around them need to be cautious. And this is the prospect for 2011-13, as the Western countries try to force the BRICs (Brazil, Russia, India and China) to export less and import more, the so-called ‘rebalancing’ strategy. Thus Budgeting for Uncertainty seems the right title for the blog’s annual Outlook for […]
EU unemployment remains at 10%
EU governments have spent enormous sums of money to support the economy over the past year. Yet in terms of a key indicator such as unemployment, the situation has got worse rather than better. This is bound to restrain consumer spending, a key factor for domestic EU chemical demand. Eurozone unemployment hit 10% in February, […]
European auto sales continue to slip
Chemical companies face a clear risk of a synchronised slowdown in demand in all 3 major Regions during H2. • The US is hitting a ‘soft patch’ at best, if not a full ‘double dip’ • China’s demand seems to have already slowed. • Europe, sadly, seems to be following the same path. Not only […]
Dow Jones Index has worst May since 1940
‘Sell in May and go away’ seemed a good tactic to the blog at the beginning of the month. It worried that we might now be approaching the ‘drawn-out fundamental downtrend’ phase of the current cycle. And in spite of several major ‘relief’ and ‘short-covering’ rallies, financial markets have continued to suffer. The US Dow […]
Crude oil falls as markets reassess economic outlook
On 6 May, the blog warned that “it would be very nervous indeed about holding a long position” in crude oil. And as the chart shows, its fears were well-founded. Since 4 May: • WTI has fallen 19%, and $16/bbl, from its $86/bbl peak • The euro has also fallen 8%, and 6c, versus the […]
Markets approach the “drawn-out fundamental downtrend” phase
Sell in May and Go Away” is the oldest rule in stock market investment. This week has certainly provided further support for it: • The major Western stock markets are down c8% • The major emerging markets are down between 4% – 13% • Crude oil prices are down 13% This May panic may well […]
Eurozone, IMF, offer €45bn aid package to Greece
After 3 months of agonising, it seems that a €45bn ($61bn) aid package will be offered to Greece. The Eurozone will offer €30bn, with a further €15bn coming from the IMF. Greece’s GDP fell 2% in 2009. Experts now forecast a 4% fall this year. The government plans higher taxes, lower spending, and a 10% […]
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