Globalisation flourished whilst economic growth was strong. Jobs lost in Western countries were replaced by new jobs. Whilst cheaper production offshore kept consumer prices low, as well as bringing more people into the world economy. But today’s economic downturn means this virtuous circle is turning vicious. Western countries are becoming more protectionist and hope to […]
Chemicals and the Economy
Restocking continues, consumers become more frugal
There are clear signs in the above chart that the inventory cycle has turned positive again, as customers restock. Globally, data from the American Chemistry Council shows chemical production now down 10.5% versus last year, after being 13.4% down in March, in line with signs that GDP in the west is now stabilising. But will […]
US and EU dominate global consumption
Interesting new research from Prof Nouriel Roubini provides some perspective on relative levels of consumer spending around the world: • US private consumption accounted for 16% of total global output in 2008 • It was valued at $10trn, just ahead of European consumption at $9trn • Total Asian consumption was under $5trn • China’s consumption […]
China aims to reduce imports
China has been a major beneficiary of the globalisation movement in recent years. In turn, it has become a tremendous importer of most chemicals. It accounts for up to 50% of total demand for many Asian chemical producers, and is a critical factor in most supply/demand balances. This position was already changing, however, as China […]
Exporting is no fun anymore
Japan and Germany are the great exporting countries of the industrialised world. They didn’t have the consumer booms seen in the USA and UK. Yet their economies are plunging, as export opportunities dry up. Yesterday, the Japanese finance minister, Kaoru Yosano, told parliament that the country was in “an economic crisis”. These are strong words, […]
Auto suppliers face difficult time as bankruptcies rise
The decline in auto sales is now threatening many industry suppliers around the world: • Today, the main Japanese car parts group has warned that “Toyota’s production cuts will cause bankruptcies among suppliers if the government restricts aid to large manufacturers”. • Last month, the main US associations requested $18.5bn in support from the Obama […]
The global stock market decline
Alan Greenspan’s comments (below), led the blog to investigate how the world’s major stock markets had moved since their recent peaks. All, as shown in the chart, are now in bear markets. Stock markets often forecast economic developments 6 – 12 months ahead, and so this represents a negative indicator for future chemical demand. Also […]
No news from Iran on nuclear issue
There seems to have been no response from Iran to the 2 week deadline set by the US and Europe on the nuclear issue. Over the weekend, Iran’s President, Mahmoud Ahmadinejad said ‘the Iranian nation would not retreat one iota from its rights.’ Earlier, Israel’s deputy Prime Minister, Shaul Mofaz, had also taken a hard […]
US, Iran to meet – crude drops $20/bbl
I suggested at the weekend that the Iran issue had the potential to move oil prices by $50/bbl either way. Since then, prices have fallen $20/bbl to $130/bbl, on news that the USA and Iran will meet tomorrow for the first time in nearly 30 years. If they reach agreement on the nuclear issue, oil […]
Israel’s training exercise worries oil markets
The US has now confirmed what oil traders have been suspecting – that Israel is preparing for a bombing raid on Iran’s alleged nuclear facilities. According to Bloomberg and the New York Times, around 100 Israeli aircraft took part in a full-scale training exercise in early June. The distance it involved, 900 miles, is apparently […]
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