Chemical markets are traditionally 6 months ahead of the wider economy, as they are so focused on consumer demand. September may therefore provide a ‘moment of truth’ for the IeC Downturn Alert, launched in April: • The petchems downturn since April may now become apparent in the wider economy • Alternatively, demand may recover strongly, […]
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ICIS pricing is a very valuable resource, particularly at market turning points. It highlighted the start of the current downturn in April, when reporting that buyers had moved to operating on a ‘hand to mouth’ basis. Now, its market editors are highlighting the fragility of demand due to ‘economic uncertainty’. This is the moment when […]
The blog was almost alone at the end of April, when it launched the IeC Downturn Alert. Today, its fear that we are close to a global downturn has become mainstream. As the American Chemistry Council report, “fears of another global recession are rising with several noted forecasters raising the chances of another recession to […]
The blog’s IeC Downturn Alert is now 3 months old. The aim was to provide enough time for readers to develop robust contingency plans, as a new global downturn became more and more likely. A key issue is that dysfunctional political systems in the eurozone, USA and China seem unable to deliver sensible solutions to […]
On Friday, the US government announced that GDP grew just 0.8% in H1. This, of course, was far below the US Federal Reserve’s confident estimate of 3.5-4% for 2011, given only 4 months ago in March. We are indeed in a New Normal. But the consensus simply refuses to recognise the impact on demand of […]
Petchem markets have moved into an interesting phase. Optimists will point to the recovery in crude oil and financial markets, plus higher prices for naphtha and benzene. They will see these as signs that we are just in the middle of a typical correction. And they will hope for further price increases over the summer. […]
“Will he, won’t he?” That was the only question in oil markets last week. On Wednesday, US Fed chairman Ben Bernanke seemed to suggest that QE3 might arrive, to follow on from his QE2 ‘LifeBoat’ for the economy. As the chart shows, oil prices leapt $3/bbl within 2 hours as he spoke. But then Bernanke’s […]
The start of a new half-year usually provides an excuse for the investment banks to publish bullish notes on oil markets. We discuss their role in Chapter 3 of Boom, Gloom and the New Normal, to be published later this month. Thus Goldman Sachs last week suggested oil markets will become “critically tight” in 2012, […]
The last week of a half-year period often sees greater volatility in financial markets, as players rush to position themselves for client reporting. This was most obvious in stock markets, with the US S&P 500 Index (pink dotted line) staging a 5% rally during the week. Brent crude oil (blue dash) eventually ended unchanged versus […]
The IeC Downturn Alert launched on 2 May. Later that day, the US S&P 500 – the world’s most important stock index – hit a post-Crisis high of 1370. Last Friday, it closed down 7% at 1268 (purple dotted line above). Many expect this to be just a minor correction, and still believe a new […]
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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 as 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.