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Chemicals and the Economy

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 […]

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 […]

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 […]

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. […]

US shale revolution puts squeeze on European chemicals groups

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 […]

Lack of demand threatens US ethylene expansions

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 […]

China PE demand grows as food safety worries increase

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 […]

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