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. […]
Tag Archives | shale gas
Will the US be able to sell all its planned new petchem volumes? That is the 3rd topic in the blog’s series about critical areas where we all think we know what’s happening, but may end up being surprised. We all know that the US now has a major feedstock advantage versus Europe, Asia and Latin America due […]
The Financial Times has carried an excellent analysis this week of the key shale gas issues facing the European chemical industry. It includes comments from a number of CEOs, as well as from the blog. Its key points are as follows: THE STRATEGIC DILEMMA “European petrochemical makers risk being squeezed between low-cost producers in the Middle East […]
The above chart paints a depressing picture for anyone thinking it should be easy to make money via a major US ethylene investment based on cheap ethane from shale gas. It shows 2012 ethylene production (red column) was still below SuperCycle levels, as were volumes for the two major derivatives – polyethylene (blue) and PVC (green). It highlights how lack of demand […]
The casual observer might be forgiven for imagining that the US ethylene industry should be seeing its biggest export boom of recent decades. Its ethane feedstock cost is back at its normal 25c-30c/gal range of a decade ago, whilst its oil-based competitors have seen their prices quadruple as oil moved to $100/bbl. But as the chart shows for […]
H1 trade date from leading provider Global Trade Information Services highlights a surprisingly weak overall export performance by US polyethylene (PE) producers. As the chart shows: Net export volumes (blue column) have recovered from the 2012 slowdown (green), but are still only up 11% versus 2011 (red) Volume is currently heavily reliant on sales into Latin […]
China’s polyethylene (PE) demand has seen encouraging signs of growth in H1. As the chart above shows (based on Global Trade Information Services data): Total demand is up 13% in 2013 (red column) versus 2011 (blue) Domestic production is up 7%, whilst imports are up 18% The Middle East is the biggest winner, with its sales […]
You can lead a horse to water, but you can’t make her drink. That seems to be the critical message from the current state of US PVC export demand. This should be booming, based on the cost advantage provided by shale gas. But reality is different, as the chart based on Global Trade Information Services […]
Something very strange has happened to oil prices since 2009, as the chart of the ratio between US oil and natural gas prices shows: • Between 1986-2008, the ratio averaged 9.6, and was typically in the 6 – 14 range (6 is oil’s relative energy content versus natgas, whilst 14 was seen during the first […]
The blog is constantly astonished by the lack of interest in many companies in the vital field of trade data. No business today, no matter how large and well-connected, can possibly hope to understand market developments without constant analysis of this data. Ironically, the lack of interest comes at a time when the quality and […]
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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.