The blog is delighted by the interest being shown in its White Paper ‘Budgeting for a New Normal’ and the recent Mid-Year Update. Almost 7000 copies have now been downloaded. Discussions are also underway with ICIS about producing a new White Paper in Q4, to accompany the blog’s annual Budget Outlook post in October. If […]
Tag Archives | Petrochemicals
In business, as in war, defence can often be the best form of attack. This seems to be the principle behind Ineos’s announcement that they intend to build a 1 million tonne deep-sea ethylene terminal to feed their 340KT ethylene oxide/glycol business near Antwerp, Belgium. The glycol business is clearly under threat from the massive […]
Over-capacity is going to be a major issue for the petchem industry over the next few years. Asian producers, in particular, are likely to be worst impacted. The reason is that they have relied on exports to China taking up to 50% of their production. But now China’s own production is ramping up, reducing the […]
The blog’s major series this week has focused on the changes that seem to be taking place in markets for the petchem ‘building block’ products, particularly ethylene, propylene, benzene and paraxylene. These changes in relative price and availability are of vital importance to a wide range of downstream chemical products. They may well prove to […]
At the mid-year point, its interesting to look at the performance of the total chemical industry, including pharmaceuticals. The chart, from the American Chemistry Council, shows global demand has now recovered to 2008 levels. Pharma is more recession-proof than other parts of the industry, as people still become ill and need treatment. In terms of […]
China’s petchem volume surge will hit imports, as electricity consumption/bank lending data shows economy’s growth starting to slow
The above chart is the blog’s best effort to correlate the change in China’s bank lending with the real economy. It shows electricity consumption (blue line) and lending (red column) since July 2008. Electricity consumption is an excellent proxy for the real economy, and probably more reliable than GDP figures, which are widely believed to […]
Major changes are underway in the US petchem and polymer market: • Middle East/Asian production will likely eliminate the US Gulf’s historical position as ‘exporter to the world’ • The arrival of cheaper gas, and the impact of shale gas, is changing cracker feedstock slates quite dramatically • The continuing decline in domestic gasoline demand […]
A year ago, the Dow Chemical stock price was below $6, giving the company a total market capitalisation of just c$7bn. Since then, Dow has regained the initiative in a very focused way. First, it sold Morton Salt for $1.7bn, then it sold $2.25bn of new equity and refinanced $4.65bn of long-term debt. Next, it […]
Will Beacham of ICIS interviewed me yesterday in London’s Trafalgar Square. Please click above if you would like to see the discussion. Or click here if you would like to see Will’s summary on ICIS news.
After yesterday’s post, Edwin Pang of Credit Suisse in Hong Kong has raised an interesting question over the likely rationale for China’s massive increase in petchem imports, such as polyethylene (PE), in 2009. As the chart shows, its monthly PE demand (production plus net imports), was very steady in 2007-8. It averaged 980kt in 2007, […]
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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.