Since Q4 2008, China has been creating one of the largest credit bubbles in history. First, it doubled bank lending to $1.4trn in 2009 (one third of GDP), and then maintained it close to this level. Secondly, it added a stimulus package worth another 13% of GDP ($580bn), focused on providing cheap electrical goods and […]
Chemicals and the Economy
Global operating rates weaken
The chemical industry is a well-known leading indicator for the global economy. This is because our products are used in so many applications around the world. The above chart of global capacity utilisation, from the American Chemistry Council, paints a subdued picture. In May, capacity utilisation was actually lower than in May last year, at […]
ACS webinar tomorrow
The blog was delighted to learn last night that 400 people have already registered for the next American Chemical Society ‘Chemicals and the Economy’ webinar. This takes place tomorrow, July 7, at 14:00-15:00 pm US EDT. It will focus on the transition now underway to the New Normal, and the challenges this presents for companies […]
US auto sales disappoint, again
Time was when US auto sales only rarely dipped below 1.1 million/month. Since the Great Recession began, however, they have only rarely been above this level. Analysts are yet to take this change on board. So June’s 1.05 million figure (red square) was described as a ‘surprise’. Yet as the chart shows, most months this […]
Selling the Rallies
There was a sustained rise in the number of wealthy Western BabyBoomers entering their peak consumption years between 1980-2000. In turn, stock market multiples rose (the US Dow Jones price/earnings ratio rose from 8 to 32), as investors valued earnings more highly. ‘Buying the Dips’ in the market became the easy way to make money. […]
Downturn Alert shows markets weakened in Q2
The last week of a half-year period often sees greater volatility in financial markets, as players rush to position themselves for client reporting. This was most obvious in stock markets, with the US S&P 500 Index (pink dotted line) staging a 5% rally during the week. Brent crude oil (blue dash) eventually ended unchanged versus […]
The blog’s 4th birthday
The blog is now 4 years old. Its readership continues to expand around the world. It is read in 137 countries and 5379 cities, as shown on the above map. Readers are also incredibly loyal. Over the past year, 39% have visited the blog at least once a week. This is up from 34% in […]
CEOs start to warn on the outlook
European ethylene contract prices (CP) can be excellent indicators of profitability trends in the industry. Buyers were caught short during December, as inventories had been run down for year-end reasons. So when crude prices started rising, they had to rush to cover their positions. The panic was particularly strong as most companies had set sales […]
Speculators begin to leave crude oil markets
Speculators, assisted by the US Federal Reserve, have driven crude oil prices to unsustainable levels over the past year. Now, the Fed is withdrawing the liquidity that has financed this rise. The above chart from Petromatrix shows the surge in crude oil speculation on the Chicago futures market since August. The light blue line shows […]
Boom, Gloom and the New Normal – Chapter 2 published today
Chapter 2 of Boom, Gloom and the New Normal is published today. In a completely new, and challenging analysis, we argue: • The Western BabyBoomers boosted chemical demand for housing, autos and electronics during their peak consumption years between 1980-2000. But this demand is unlikely to be sustained, now they are entering the 55+ age […]
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