Downturn Alert shows prices keep falling

D'turn 20May11.pngIt is now 4 weeks since the blog launched its IeC Downturn Alert. Since then, as the chart shows (based on ICIS pricing reports):

• Brent (blue dotted line) is down 11%
• Naphtha (red) is down 13% in Europe
• Benzene (green) is down 9% in Europe
• HDPE export (purple) is down 7% in the USG
• PTA import (red) is down 9% in China

These are serious price declines. They support the blog’s fears that buyers have now retreated to the sidelines.

Downturn Alert was introduced to provide chemical companies of an early warning of a slowdown, after the euphoria of Q1’s excellent results.

Of course, prices may still rally. But for the moment, the Alert is suggesting we may now be at the start of the downturn that has always followed previous periods of high oil prices.

About Paul Hodges

Paul Hodges is Chairman of International eChem, trusted commercial advisers to the global chemical industry. He also serves as a Global Expert for the World Economic Forum. The aim of this blog is to share ideas about the influences that may shape the chemical industry and the global economy over the next 12 – 18 months. It looks behind today’s headlines, to understand what may happen next in critical areas such as oil prices, China and Emerging Markets, currencies, autos, housing, economic growth and the environment. 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.

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