Tag Archives | over-capacity

Maersk’s $3.7bn new ships investment underwater as global ‘demographic dividend’ ends

The red line in the above chart from the Financial Times shows how far Eurozone growth has diverged since 2008 from the previous SuperCycle trend (in blue). Unfortunately, most companies failed to spot what might happen as a result of Europe’s ageing population.  Instead they spent $bns on new capacity in anticipation of a strong economic […]

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Consensus views on growth, commodity regulation, start to change

In early March, the blog described itself as feeling like “a lonely voice, focused on what is really happening in the real world”.   But gradually since then, the consensus view on growth and commodities regulation has begun to shift in its direction.  For example, a recent New York Times article on China by Nobel Prize-winner Paul Krugman could have […]

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Paraxylene starts to dominate the polyester chain

Last April, China’s polyester market provided an early warning signal that the current downturn was about to start. Now, it is flagging an important change in relative positions within the value chain. 9 months ago, the divergence between crude oil prices and those for the C8 chain highlighted slowing end-user demand. The chart above updates […]

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Is this a V, U, W, or L-shaped recession?

There is now general agreement that we are in a global recession. The World Bank’s new ‘Global Economic Prospects’ report expects global GDP growth of only 2.5% this year, and just 0.9% growth for 2009. This is well below the 3% level that signals recession. And the Bank also forecasts that world trade will contract […]

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Dow warns of need for “radical actions”

Andrew Liveris, Dow CEO, has consistently warned that we are facing a major recession. Today, in a Bloomberg interview, he spells out the need for “radical actions” to “take out capacity”. He notes that Dow’s volumes are down 10%-20% this quarter, and expects this to continue into H1 next year. And he forecasts that “we […]

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