Sometimes a picture really is worth 1000 words. This is certainly true with the above chart, showing China’s producer price index since 2008: • It highlights prices up 10% at the peak of the export boom, before the H2 2008 crash • Then it shows the short-lived recovery after China’s massive lending boom • Finally, […]
Chemicals and the Economy
US shale gas – ‘its a demand thing’
The 25 years of the BabyBoomer demand supercycle between 1983-2007 cover the careers of most people in the industry. Over this quarter-century, we all grew to accept that low-cost and reliable supply was key to success. Demand would always take care of itself. Today’s world is the opposite. Low-cost supply is no longer enough on […]
China’s Q1 PVC imports drop 98% as housing bubble targeted
Q1 data from Global Trade Information Services provides further evidence of the slowdown underway in China. As the chart shows, the dramatic drop in net PVC imports suggests the new leadership are determined to burst the house price bubble they inherited: • Imports (red column) were down a startling 98% versus Q1 2011 (blue) • […]
Crude oil and commodities decline as dollar rises
Friday provided a good test of the blog’s analysis that Japan’s aggressive policy of devaluing the yen could result in major downward pressure on crude oil prices: • The yen crashed through the $1: ¥100 level, ending at a 4-year low of $1: ¥101.6 • Brent sold off by $2.80/bbl, only recovering after Asian markets […]
The blog on MoneyWeek TV
The importance of demographics in driving demand is clearly becoming more widely understood. This week, the blog was interviewed by the editors of MoneyWeek (the UK’s leading investment magazine) in the implications of today’s ageing western population for investors. The interview covered a wide range of subjects: • The importance of 2013 as the year […]
US auto sales growth declines for 5th successive month
Blog readers read it here first. Last month the blog did some simple sums to show that US auto sales were unlikely to continue to grow at the 8.6% reported rate of Q1. The reason was that sales had been increased by the need to replace the 250k autos destroyed during Hurricane Sandy in November. […]
Oil markets risk rapid repricing – Part 2
As the blog discussed yesterday, central banks have now kept oil prices above the historical $10-30/bbl range for 10 years. But can they remain there forever? What might bring them back in line with the fundamentals of supply/demand? And what would be the risks if this happened? The background can be simply stated: • Investors […]
Oil markets risk rapid repricing – Part 1
Since 1900, as the chart shows, oil prices have never been so high for so long as now. Until 2003, they had only been above $30/bbl for 4 years between 1979-1982, during the OPEC production cuts in the Iran crisis. But since 2004, they have been continuously above this level. The reason is the misguided […]
Central banks pop champagne corks as stock markets soar
Central bankers mean well. But, of course, good intentions do not guarantee good results. Their intention since the start of the 2008 crisis has been to boost financial markets. They have therefore provided $tns of liquidity, which has indeed produced record highs in major stock market indices such as the S&P 500 and Dow Jones […]
’60 is the new 60′ for the cosmetics industry
More and more industries are now entering the New Normal and refocusing on the new areas for future growth, such as the New Old 55+ generation in the West. Cosmetics companies are the latest to change direction: • When the Boomers were young, they encouraged women to be youth-obsessed • But now, the key messages […]
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