Global demand is continuing to slow, yet chemical industry capacity is continuing to ramp up. As a result, supply gluts are likely to appear in many key areas as we move into the second half of the year. That is the key conclusion from the latest American Chemistry Council data for global chemical capacity and […]
Tag Archives | US Federal Reserve
Thank goodness for Janet Yellen, and China’s provincial governments. That was clearly investors’ thoughts, when they bid up chemical company share prices during Q1. For as the chart above shows, there was nothing in the fundamentals of supply and demand to suggest economic recovery was finally underway. Instead, the latest American Chemistry Council data shows […]
Oil markets are entering a very dangerous phase. Already, many US energy companies have gone bankrupt, having believed that $100/bbl prices would justify their drilling costs. Now the pain is moving downstream. The problem is the central banks. Hedge funds have piled into the oil futures markets since January, betting that there would be lots […]
Central bank policy-making is becoming more and more dysfunctional, as German Finance Minister Wolfgang Schäuble‘s comments highlighted on Friday: “The debt financed growth model has reached its limits. It is even causing new problems, raising debt, causing bubbles and excessive risk taking, zombifying the economy….and may have laid the foundation for the next crisis.” One clear sign […]
The Financial Times has kindly printed my letter below, arguing that central bank stimulus can’t restore growth to previous Super Cycle levels. Sir, John Plender’s excellent analysis “Central banks’ waning credibility is the real threat to confidence” (Insight, February 17) highlights the need for a new narrative to explain the economic slowdown of recent years. […]
The Great Unwinding of policymaker stimulus was the major issue in financial markets in 2015. And it is set to have even greater impact in 2016 once Phase 3 begins. The chart above highlights the astonishing changes that have taken place since the Unwinding began in mid-August 2014; Phase 1 has so far seen Brent […]
Media hype over the potential for a 0.25% interest rate rise by the US Federal Reserve is well underway. But as often happens these days, this is missing the bigger picture. The issue is simple: developments in China are far more important to the global economy than anything the Fed might, or might not, do […]
They don’t ring bells to warn of financial market tops and bottoms. But there are 2 very good substitutes in terms of the Farrell and Coppock Indicators, as the above chart for the UK stock market since 1973 shows: It is based on the Financial Times All-share Index (FTA), as the FTSE 100 only began […]
Financial markets are slowly descending into chaos. The process began in China over the summer, and has now started to impact Wall Street and other developed markets as the Great Unwinding of policymaker stimulus continues. The problem is that successful investment, whether in financial or chemical markets, requires the combination of A clear understanding of […]
Central banks have acted as the proverbial tooth fairy towards financial markets in recent years. But they have not just left a small amount of money under the pillow when a child lost its first tooth. Instead they have printed trillions of dollars via Quantitative Easing (QE), to persuade investors to buy shares and commodities, […]
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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.