We are now nearly at the end of May, and still there is no sign of a sustained recovery in demand. This mirrors the weakness seen in January and March – normally also very strong months. Now, unless seasonal patterns are overturned, demand will remain slow until September – when people return from holidays and […]
Tag Archives | liquidity
A month ago, the blog highlighted the potentially major implications of the Bank of Japan’s (BOJ) push to devalue the yen as follows: “However, the BOJ has a slightly different agenda. It aims to devalue the yen, not the US$. And the yen has already fallen close to $1: ¥100 compared to $1: ¥93 before […]
Financial markets long ago lost all touch with reality. Not only have central banks provided $tns of cheap liquidity with the specific aim of pushing stock markets higher. But they have also allowed computers to dominate trading, so no single market now knows what it is pricing. Chemical markets, and those who operate in them, […]
The blog’s 6 monthly review of global stock markets highlights a very unusual pattern since global demand and chemical markets peaked on 29 April 2011, as the chart shows: • Markets in developed economies have powered ahead with Japan up 24%, the US S&P 500 up 14%, the UK up 8% and Germany up 6% […]
“Two roads diverged in a yellow wood, And sorry I could not travel both” These lines by famous American poet Robert Frost provide a good description of the critical cross-roads now being approached for the 3rd time since June 2008, as the impact of the QE3 stimulus reduces. Each time previously, policy makers have simply […]
As we approach year-end, it is interesting to review performance of the blog’s 3 benchmark products since the start of the major central bank liquidity programmes. The chart begins in January 2009 when the G20 stimulus programme was being prepared, and then follows the impact of the QE2 programme in H2 2010, Twist in H2 […]
‘Masterly inactivity’ was Wellington’s policy in his successful European wars against Napoleon in the early 19th century. The English general was always under great pressure from the politicians to ‘do something’. But Wellington knew he had to defeat Napoleon decisively, and could not risk losing men and resources in irrelevant actions. His Waterloo victory then […]
Some things are too ‘obvious’ for highly-paid professionals in the financial world to accept. If life was this simple, then clients might ask why their fees were so high. Therefore they maintain a fiction that what is obvious is not the full story. Interest rates are a classic example of a simple issue which is […]
A year ago, Petromatrix highlighted the short-term ‘triangle’ that was being drawn by oil prices. This describes a period when sellers and buyers are evenly balanced, and neither side can gain momentum to take prices in their favoured direction. It usually leads to a sharp move, either up or down, when one side wins. At […]
The above chart, from the invaluable American Chemistry Council (ACC) weekly report, highlights the scale of Q1′s inventory build in N American polymer markets (polyethylene, polypropylene, PVC). This build took place as consumers down the value chain rushed to buy forward, as WTI oil prices surged 41% between November – April. Their buying was not […]
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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.