In my interview for Real Vision earlier this month, (where the world’s most successful investors share their thoughts on the markets and the biggest investment themes), I look at what data from the global chemical industry is telling us about the outlook for the global economy and suggest it could be set for a downturn. “We look at […]
Chemicals and the Economy
Oil price fall creates major inventory risk for chemical markets
Oil prices have now fallen $50/bbl since I forecast their collapse in August. But it is only recently that companies and investors have begun to realise this price fall is real, and not just a minor blip. As a result, few have yet recognised the extent of the collateral damage that is likely to appear in […]
Oil tumbles $12/bbl as demand worries increase
Cracks have begun to appear in commodity markets as QE2 ends. Crude oil has now fallen $12/bbl on demand worries since the blog suggested a top might be close. And the Wall Street Journal has confirmed that the super-computers who have driven prices skyward, are now beginning to retire from the party. This builds on […]
US sales slip as inventories rise
The US is 25% of the global economy, and its performance matters enormously to the chemical industry. So it was good news that US GDP growth stabilised at 2% in Q3, versus the 1.7% level of Q2. But the underlying trends during 2010 are worrying, as the above chart shows: • Sales growth (blue line) […]
US auto sales remain depressed
February brought no relief for the troubled US auto industry, so critical to chemical sales. Sales were down 41% versus 2008. Even more worryingly, sales over the past quarter, and last 6 months, averaged under 10 million/year. Chrysler’s results also show the severe cost of gaining market share. It gained 1.4% in the retail market, […]
Destocking follows previous recession experience
Destocking is currently a key issue for the chemical industry. The above chart, from Andrew Sentance of the Bank of England, provides some useful clues as to where we are in the cycle. It shows current performance (the green line) versus the history of stock levels in the recessions of the early 1980’s (blue) and […]
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