“Within 20 years, we will be an economy that doesn’t depend mainly on oil“. With that one statement, deputy Crown Prince Mohammed bin Salman (pictured above), changed the outlook for oil and energy markets. The world’s major oil producer, with the lowest cost, was signalling that the kingdom will no longer be supply-driven, focused on […]
Tag Archives | new normal
China’s slowdown is continuing to reverberate around the world. One way of measuring this is to look at auto sales in countries closely linked to China’s market such as Japan, Russia and Brazil. As the chart shows, they did well during China’s stimulus period, but they are struggling now. By comparison, more self-sufficient India has […]
More than $2.3tn was wiped off the value of global stocks last week as China’s slowing economy and currency depreciations spooked investors around the world, leading to the worst start to a year for markets in at least two decades. This is the Great Unwinding of policymaker stimulus in action. Worse is likely to come. […]
Global chemical production growth continues to slow from the peak of 3.7% seen in April 2014. September’s reading from the American Chemistry Council was down to 3%, with most major regions showing a decline: Asia has halved from 6.4% to 3.2%; ME/Africa has fallen from 6.1% to 3.5%; Latin America is negative at -3.2% W […]
Auto manufacturers, their suppliers and investors need to prepare themselves for a triple shock from China’s slowing economy, as I describe in my latest post for the Financial Times, published on the BeyondBrics blog The first shock is already under way. As the chart shows, China’s slowdown has caused passenger car volumes to decline in the Bric economies – […]
There were record numbers at last week’s European Petrochemical Association annual meeting in Berlin. But most of the 2900 attendees were in subdued mood. Once again, it seems, the industry has chosen to sanction vast new investment at the top of the cycle, and will now suffer the consequences as it all comes online at […]
China’s President Xi went to Seattle at the start of his recent US visit, to meet the leading US internet companies. It was the clearest possible signal of his priorities for the future of China’s economy under his New Normal policies. He spent half a day on the Microsoft campus, and had a private dinner […]
Everyone is now beginning to notice the change in economic policy in China. And concern is rising about the outlook for all those new petchem investments about to come online, whose rationale has been the need to supply ever-increasing growth in Chinese demand. The chart above highlights the reality behind this wishful thinking: Everyone “knew” […]
“If the lips are gone, the teeth will be cold”: China’s New Normal policies require companies to undertake radical strategy reviews
Wishful thinking can be terribly dangerous for company profits. Taken to extremes, it can lead them into bankruptcy. Recent developments in China thus make it essential for every company to immediately review its strategy for doing business in/with the country, against a realistic outlook for 2016-2018 GDP growth will likely be zero, and could well […]
My latest post for the Financial Times, published on the BeyondBrics blog is below | Jul 27 15:08 | Red is a lucky colour in China, which is why share price displays go red when prices are rising. A green display means prices are falling, the opposite to stock markets elsewhere. There is a similar discontinuity between the short-term impact […]
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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.