Tag Archives | shale gas

Oil prices at $50/bbl, China slowdown – the New Normal arrives

Welcome to the New Normal. The Great Unwinding of policymaker stimulus has led global oil prices to drop back to $50/bbl.  Meanwhile China, the major source of demand growth since 2009, is now seeing a major slowdown. And, of course, this is still only the beginning of the great transformation that is now underway as we enter […]

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US shale gas bubble will end in tears for ethylene expansions

A return to lower oil prices is good news for the global economy.  But it is bad news for all those who have invested in expanding ethylene production on the assumption that US gas prices would maintain the temporary advantage of recent years.  As the chart shows: Oil (blue line) has around 6x the energy […]

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Companies see confidence ebb away as China slows, US cost advantage weakens

It feels like the end of an era, as we survey the usual quarterly update of chemical company results.  For several years, there have been 3 or 4 key dimensions: US companies have been very profitable due to shale gas Asian companies have done well with volume, due to Chinese demand Middle Eastern companies have done well due to […]

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The real challenge is a lack of challenge

We all remember the Hans Christian Andersen story about the Emperor with no clothes.  His subjects were told that only those who were stupid or incompetent would be unable to see his wonderful new suit. Of course, nobody wanted to appear stupid or incompetent.  So when the Emperor paraded in his new clothes, nobody wanted to tell him the obvious.  It was left to a child […]

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US PVC exports tumble as demand weakens in key markets

The US PVC industry is hitting new problems, to add to the post-2006 collapse of the US housing market. Yet only 10 years ago, it was riding high.  Demand into housing (the main outlet) was at record levels thanks to subprime lending, and PVC production had just hit a record 7.3 million tonnes. Even after the financial Crisis, global […]

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Next ACS webinar on Thursday 5 June

“Not with a bang but with a whimper”. The blog’s 6-monthly webinar for the American Chemical Society (ACS) takes place next Thursday, 5 June, at 14.00 Eastern Summer Time.  And once again, the ACS has kindly arranged for blog readers to register for it free of charge. As feared in last December’s Year-end Review, the promised economic […]

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US shale gas expansions highlight lack of demand

One good thing may come out of the current excitement over the US ethylene expansions being discussed on the basis of shale gas developments. Boards may decide to look at seriously at the way yesterday’s ‘demographic dividend’ has now become today’s ‘demographic deficit’.  That would be a major step forward for the US and the […]

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China focuses on domestic PE production, ME/SEA imports

China’s growth has been the main support for the global economy since the Crisis began in Q4 2008.  The slide above captures the extent of this in polyethylene (PE), one of the world’s largest chemical markets, based on data from China’s chemical association and Global Trade Information Services: The total market grew 11% in the 3 […]

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Q4 results show companies still waiting for something to turn up

We all live in hope.  That seems to be the underlying message from the blog’s quarterly survey of company results. Nothing has changed since last quarter or indeed Q2, when BASF noted that “achieving our earnings target is significantly more challenging today than we had expected”. Yet this latest quarter was, of course, supposed to be […]

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A day in the life of an “activist” fund

A prominent “activist” fund in New York has told Dow Chemical to spin off its performance plastics, performance materials and feedstocks-and-energy units.  The news led the blog to imagine a fictional scene in the offices of Activists-R-Us fund last Tuesday morning, as the news came through.  Any resemblance to actual events is purely coincidental, as they say in movies. […]

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