Entries from Chemicals & The Economy tagged with 'PTA'
Prices rise whilst demand falls
The blog is extremely concerned about recent market developments. Nobody minds higher prices, if they are a response to strong demand and can be passed through to customers. But today's high prices have nothing to do with strong demand. On...
Computers push oil prices higher, again
Trading volumes in financial markets are very low these days. Many ordinary investors are on holiday, and others are focused on the Olympics. So it is easy for the high-frequency computers to create major volatility - and large profits for...
Financial markets hope for more policy 'lunacy'
The last few days have seen financial markets rallying, whilst the news from the real economy gets worse. US GDP growth in Q2 was just 1.5%. And the Wall Street Journal notes the recovery since 2009 has been the weakest...
'Waiting for Bernanke' is hottest show on Wall Street
'Waiting for Godot', the great play by Irish writer and Nobel Literature Prizewinner, Samuel Beckett, deals with the meaning of existence. Written just after the Second World War, its two characters wait endlessly for the arrival of Godot. US financial...
A is for Agility in today's VUCA world
Pity the poor purchasing manager, who: • Must keep inventories low as end-user demand remains slow, and the CFO remains very worried about the working capital risk • Must keep inventories high, to minimise the risk of running short if...
IMF warns of lower global growth
Once again, the chemical industry has performed its role as a reliable leading indicator of the global economy. On Friday, the IMF warned their next forecast: "Will be tilted to the downside and certainly lower than the forecast that was...
Weak chemical markets suggest difficult times ahead
Over Christmas, the blog spent some time considering whether its IeC Downturn Alert had served its purpose. By luck, or possibly judgement, it had been launched at the exact market peak on 29 April. And hopefully it had helped to...
Another Minsky Moment may be approaching
The global economy is now in the middle of its 3rd downturn in the past 4 years. The chart above shows how the blog's benchmark products have acted as leading indicators on each occasion (yellow highlight): • In 2008, naphtha...
Financial markets rally as real economy weakens
Petrochemical markets continue to provide plenty of warning signs about the deteriorating state of the global economy. As the above chart shows of price movements since January, even benzene is now weakening as supply disruptions fade. The obvious conclusion is...
"A failure to stay ahead of events"
Petchem markets are doing an excellent job in their role as a leading indicator for the global economy. But as we warn in Boom, Gloom and the New Normal, policymakers remain in Denial about their message. The chart above spells...
What goes up, comes down
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...
Market volatility hits new peaks
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...
Complacency rises as markets fall
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...
Buyers disappear as oil prices fall
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...
Cash-flow fears rise as the 'storm' gets nearer
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...
Downturn Monitor approaches its anniversary
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...
Financial markets rally on false rumour
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...
Markets weaken as real problems remain unsolved
It is hard to be very optimistic about the demand outlook for Q2. Demand in Q1 was lacklustre, even though it should have been the strongest quarter of the year. H1 is seasonally strong, and Q1 also benefited from Easter...
Oil prices near Q2 2008's record level
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...
Why benzene trumps traditional economic indicators
The blog is very pleased to have been invited to contribute to the Financial Times' new FT Data blog. Its first post looks at benzene's excellent forecasting record during the current crisis. It also looks at what PTA may be...
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