Imagine your government decided to shutdown most of the industry in two major cities for 2 weeks or more? Say Detroit and Chicago in the US, or Milan and Turin in Italy, or Leeds and Manchester in the UK. Now you will have some idea of the scale of the shutdowns being mandated in China […]
Tag Archives | refining
I was kindly invited last week to give a keynote address at the annual ME-TECH conference in Dubai. Naturally, there was intense interest in my argument that oil prices were most unlikely to recover to the $100/bbl level. Instead, I suggested they would likely return to their long-term historical average of $33/bbl (in $2014). And I argued that this would be good news […]
There are 2 ways to improve operating rates in an industry. One is to increase volumes, the other is to reduce capacity. The latest APPE data covering H1 2014 for European olefin capacity highlights how the European petrochemical industry has successfully used both mechanisms over the past year to improve its position: Ethylene volume increased to 9.8MT, versus […]
When the world changes, companies either change with it or go out of business. The market for stagecoaches was never the same once cars came along. And not many students use slide rules today, now calculators are available. Usually, of course, these market changes are slow-moving. So companies often fail to respond in the hope the old world […]
Recovery has been delayed, again. That is the clear message from the blog’s extensive discussions with key executives in global and regional markets over the past 2 weeks. In summary as this ICIS video interview suggests, the picture is as follows: Base chemical demand has broadly fallen from peak levels in Q3 Most chemical buyers built inventory in […]
Almost unnoticed, an important shift is underway in propylene markets. Propylene (C3) is the second largest olefin after ethylene, with production around 75 million tonnes in recent years. Its main sources are steam crackers and refineries – neither of which see C3 as their core product. Thus the recent increased use of ethane as a […]
The latest EU olefin operating rates (OR%) were very disappointing, even though they were not a surprise. As the chart shows, ethylene rates were just 81% (based on APPE data). They were far below the 90%+ rates that were normal before the crisis began. These rates would normally have left the industry in crisis mode […]
There seems little doubt that the global economy is now entering a new downturn. Pessimists may worry that it has already begun in Q3. Optimists might hope it will be delayed till Q4, or even Q1. But almost all major indicators are pointing in the same direction. • On the macro-level, the latest American Chemistry […]
Q1 saw near record margins for European petchem producers. And there was also a scramble for product, as buyers rushed to secure product ahead of feedstock price-related increases. But this remained a supply-led market. As the chart above shows, based on APPE data, Q1 production (red triangle) was just 5.1 million tonnes. It was slightly […]
The blog is a great believer is learning from the secrets of the world’s most successful chemical companies. Thus it was fascinated to read a report by ICIS’s Stephen Burns of a major speech by ExxonMobil (EM) president Stephen Pryor. Pryor warned that “capturing the benefits of downstream integration requires more than simply co-locating petrochemical […]
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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.