Tag Archives | Petrochemicals

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Global chemical recovery starts to slow

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 […]

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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 […]

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Strategies for success in the US petchem industry

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 […]

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Dow puts debt problems behind it

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 […]

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Restocking not the same as Recovery

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.

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China’s petchem imports soar on oil price speculation

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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Moody’s sees negative outlook for Asian petchems

Its not just the World Bank that is concerned about the outlook for East Asia. Today, Moody’s (the ratings agency) says it has a negative outlook for the petrochemical sector over the next 12-18 months. It concludes: • “In response to weakening global demand, Asia Pacific’s petrochemical companies are rapidly shedding inventory and delaying their […]

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Dow pays $78.97/share for Rohm & Haas

The blog has always had enormous respect for Dow. This was due to their ability to manage unconventional risks, in a way that other chemical companies (such as the blog’s former employer, ICI), found impossible. Even when things went wrong, they always had a Plan B, which allowed them to exit on a sensible basis. […]

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Cracker margins remain under pressure

The chart above, from Paul Ray’s excellent ‘ICIS Weekly Margin Report’, clearly shows the level of pain currently being suffered by naphtha-based cracker operators. Based on European pricing, it also demonstrates the great difference between today’s recession versus the ‘dip’ of 2002/3: • Margins based on contract prices fell to €151/t in January • They […]

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BASF – the German oil and gas company

BASF’s reported results for 2008 show that its profits are increasingly coming from the oil and gas sector. Geographically, it is becoming similarly dependent on its German operations. Agricultural and performance products put in a strong performance during the year, with their combined EBIT rising €300m to €1.5bn. But the chemicals, plastics and functional businesses, […]

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