Don’t panic is the blog’s suggestion, after last week’s market collapse. Instead, the important thing is to plan for what might happen next. Scenario planning is absolutely critical to survival over coming months. The blog’s advice is to assemble your management team as quickly as possible, and ask everyone to come prepared to be honest […]
Tag Archives | S&P 500
Petchem markets provided a perfect case study of Volatility last week, confirming the blog’s view that we are heading into a VUCA world where Volatility, Uncertainty, Complexity and Ambiguity will dominate. This was also real volatility, where prices crashed downwards and surged upwards at the same time. And it involved 2 of the ‘building block’ […]
Financial markets are telling us something important about the outlook. Profitable themes over the past month have been expectations of weakness in crude oil prices, in China’s economy, and in the financial sector; plus positive views on long-dated government bonds in the JUUGS (Japan, UK, US, Germany, Switzerland). 90% of market players probably dismiss most, […]
Petchem markets continue to fulfill their role as leading indicators for the global economy. The chart shows the benchmark products in the IeC Downturn Monitor since January 2011: • PTA prices in Asia (red line) have remained weak throughout, clearly signaling the major slowdown that is now underway • US polyethylene export (purple) prices managed […]
The blog fears the storm discussed last month is getting closer. Oil prices have weakened, with Brent falling $7/bbl last week to $113/bbl as Iran worries reduced. Attention is thus refocusing on the fundamentals, where US oil inventories are now at 21-year highs. We may therefore be about to discover that high oil prices have […]
It is almost a year since the blog launched its IeC Downturn Monitor. The aim was to try and avoid the problems seen in H2 2008, when operating rates remained high down the value chain whilst demand fell. The above chart shows the weekly changes in its 4 benchmark products from 1 January, with movements […]
Last week saw yet another example of the damage being caused to financial markets by the computerised high-frequency traders (HFTs). As the chart shows, the S&P 500 jumped 20 points on Thursday (1.5%), whilst the Dow Jones Industrial average jumped over 200 points. The cause was a rumour that China’s GDP would come in at […]
Finally, and far too late, policy makers are waking up to the damage that today’s high oil prices are doing to the global economy. Q1′s oil price averaged $119/bbl, just 7% below Q2 2008′s record $127/bbl ($2012). Thus Saudi Oil Minister, Ali Naimi, last week told the Financial Times: “High international oil prices are bad […]
Q1 should have been a strong quarter for global petchem demand: • Buyers had to restock in the New Year, as CFOs had cut working capital for year-end reasons • In the West, Easter is delayed until April, and the USA has benefited from the warmest winter in 50 years • China’s holidays took place […]
“Two roads diverged in a yellow wood,And sorry I could not travel both“ The opening of Robert Frost’s famous poem ‘The road not taken’ aptly sums up today’s market situation:•Financial markets continue to be supported by the Fed’s Operation Twist•Petchem markets are slowing in reaction to weaker consumer spendingBoth of them cannot be right. Either […]
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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.