2013 has seen 3 types of markets develop for the blog’s IeC Downturn Monitor portfolio as the chart above shows: Financial assets such as the S&P 500 (purple) have soared, as did the US$ against the yen (orange) Crude oil (blue) and naphtha (black) tried to follow, but found it difficult to pass though the higher prices Benzene (green) and […]
Tag Archives | naphtha
Crude oil markets long ago lost their role of price discovery. Since early 2009, they have instead been dominated by pension funds seeking to find a ‘store of value’ as the US$ weakened, along with hedge funds enjoying a money-making ‘momentum play‘. The reason has been the $tns spent by western central banks in their […]
The blog is extremely concerned about recent market developments. Nobody minds higher prices, if they are a response to strong demand and can be passed through to customers. But today’s high prices have nothing to do with strong demand. On the contrary, in fact. Most consumers are actually reducing output. Equally, the wider economic outlook […]
Trading volumes in financial markets are very low these days. Many ordinary investors are on holiday, and others are focused on the Olympics. So it is easy for the high-frequency computers to create major volatility – and large profits for their owners. Thus they managed to create a 1.5% fall in the S&P 500 on […]
The last few days have seen financial markets rallying, whilst the news from the real economy gets worse. US GDP growth in Q2 was just 1.5%. And the Wall Street Journal notes the recovery since 2009 has been the weakest in the post-War period. But that doesn’t matter to the computerised trading systems that now […]
‘Waiting for Godot’, the great play by Irish writer and Nobel Literature Prizewinner, Samuel Beckett, deals with the meaning of existence. Written just after the Second World War, its two characters wait endlessly for the arrival of Godot. US financial markets are currently staging their own version of the play: • They no longer see […]
Pity the poor purchasing manager, who: • Must keep inventories low as end-user demand remains slow, and the CFO remains very worried about the working capital risk • Must keep inventories high, to minimise the risk of running short if supply problems develop and prices jump Benzene (green line), as always, is the great example […]
Once again, the chemical industry has performed its role as a reliable leading indicator of the global economy. On Friday, the IMF warned their next forecast: “Will be tilted to the downside and certainly lower than the forecast that was published three months ago” This will not be news to blog readers. As the chart […]
Over Christmas, the blog spent some time considering whether its IeC Downturn Alert had served its purpose. By luck, or possibly judgement, it had been launched at the exact market peak on 29 April. And hopefully it had helped to alert companies to the difficult times that lay ahead. But by December, most analysts and […]
The global economy is now in the middle of its 3rd downturn in the past 4 years. The chart above shows how the blog’s benchmark products have acted as leading indicators on each occasion (yellow highlight): • In 2008, naphtha (red line) PTA (purple), benzene (green) and polyethylene (PE, blue) all peaked around the middle […]
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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.