By John Richardson The above chart is the most important indicator about why the current rally in equity markets is at high risk of a sharp correction. Volumes in European markets (the blue line) and US markets (the red line) are significantly below levels in 2006-2012. High volumes are always a bullish indicator as it means […]
Asian Chemical Connections
China: The Politics Behind The “Recovery”
By John Richardson THE overall HSBC flash purchasing managers’ index for January, which was released yesterday, was at a two-year high (see the above chart), with the sub-index of production at a 22-month high. This is great news for equity values and commodity prices, including petrochemicals. We might well see a rally in petrochemicals prices at […]
Crude Oil Price Risks Escalate
By John Richardson FINANCIAL speculators began to play an increasing role in crude-oil markets following liberalisation of financial trading rules, signed into law by Bill Clinton in 2000, as we argued in chapter 3 of our e-book, Boom Gloom & The New Normal. The disconnect between real supply and demand for crude and the influence […]
The US Shale Gas Boom Will End
Don’t follow the herd… By John Richardson ISN’T it amazing how we keep getting caught out by the unexpected, from the global financial crisis to China is entering a period of much-lower growth? No, not really. As long as we keep being driven by the short attention-span of financial markets and the demands of quarterly […]
Recovery? What Recovery?
By John Richardson CHINA’S apparent demand for polyethylene (PE), which is a measure of local production plus imports, rose by 4% in January-September this year compared with the same periods in 2010 and 2011, according to Global Trade Information Services (see the above chart). This is an improvement on the 1% growth seen in the January-August […]
World Heading For L-Shaped Recovery
Mr Bernanke, please take note By John Richardson The recovery is always six months away and so while most people have written-off the first half of next year, the hope is that by H2 everything will be back to normal. But as fellow blogger Paul Hodges points out in this video, which he further underlines […]
Goldman Sachs Changes Its View On Oil
By John Richardson OUR blogs are awarding themselves a pat on the back today. The reason is that investment bank Goldman Sachs, the largest player in commodity markets, has completely reversed its analysis of oil markets. They now accept our view, and that of the blog we work with very closely with, Chemicals & The […]
Risks To Japan From China Dispute
By John Richardson THE Japanese economy is at great risk from the East China Sea dispute which, if unresolved, could result in a long and bitter trade war with China, said several chemicals industry sources. Japanese electronics and auto companies could even be forced to leave China, they warned. “If the Chinese kick Japanese companies out of […]
No Eurozone Miracle Cure
Source of picture: Wikipedia By John Richardson THE eurozone hasn’t been rescued by the programme of sovereign bond purchases, announced a month ago by Mario Draghi. Wolfgang Munchau, in this excellent article in the Financial Times, explains why. This article is worth printing out and pinning on your office wall as a reminder that […]
Rising Labour Costs Threaten US Projects
By John Richardson RISING labour costs will impact the viability of US petrochemicals projects as a result of the surge in overall hydrocarbons construction activity, an industry source told the blog. “Unless companies lock-in their labour costs fairly quickly, before the big surge in activity ahead of numerous cracker and derivatives start-ups planned for 216-2017, […]
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