The blog has been thinking about last week’s leaked report from the International Energy Agency (IEA). This said that the world needs “to invest $360bn each year until 2030 to replace falling oil production and increase supply”. The IEA based this sum on a new analysis of 500 oilfields, which showed the current depletion rate […]
Chemicals and the Economy
China’s Pearl River Delta slows
The Pearl River Delta is the original heart of China’s industrialisation process. The blog first visited 20 years ago, as China slowly opened up to the West, and was amazed to discover that cities such as Guangdong were already as large as Hong Kong. Today, along with Shanghai, the region is the manufacturing capital of […]
BASF warns on 2009
Back in August, the blog noted that BASF chairman Jurgen Hambrecht was forecasting that “the world will still continue to grow respectably”, although he foresaw a temporary slowdown into H1 2009. Yesterday, however, this mood of relative optimism had disappeared as BASF announced Q3 results. Hambrecht is now forecasting, along with Dow’s Andrew Liveris, that […]
Deflation threatens
Prof Nouriel Roubini of New York University was one of those to correctly forecast a global recession. He is now warning in a detailed new article that “sharp deflationary pressures” are likely to hit in 2009. As evidence, he notes: • the supply glut that has emerged in “housing, consumer durables, motor vehicles” • “the […]
‘Financial panic’ over? Fed lends direct to companies
The US Federal Reserve is now bypassing the banking system, and dealing directly with major corporate borrowers. These have been cut off from many sources of credit, as banks hoarded their cash. The impact has been immediate, with 1500 transactions already done for a record $67bn – 10 times last week’s daily level. This should […]
US house prices fall again
US house prices continued their downward path in August, and “every region reported negative annual returns”, according to today’s new Case-Shiller index. Nationally, average prices were down 17%, with Phoenix and Las Vegas down over 30% since last August. The recent Panic in financial markets makes a quick recovery even more unlikely. US chemical companies […]
OPEC cuts production, worries about demand
Two main factors weigh on oil markets. The first, as PetroMatrix note in their latest weekly report, is that speculative players in virtually all commodity markets are being forced to deleverage their positions, and so “the bottom will be dependent on the end of the firesale”. The other factor is the continuing fall in demand. […]
Benzene drops to naphtha price
Benzene is an excellent indicator of the outlook for industrial production, and hence for general chemical demand. Thus tonight’s ICIS news report that prices for benzene and its naphtha feedstock, are close to parity (around $390/t), tells us just how dire market conditions have become. The blog believes this has only ever happened once before […]
The lighter side
Last week, the Financial Times tried to lighten the current mood of doom and gloom. It began a letters page discussion about the merits of humour as an antidote to panic. Many blog readers clearly enjoyed the recent posting ‘A new bank model’. They will therefore understand why the FT today carries the blog’s suggestion […]
US to help homeowners
There are welcome reports this morning that the US government is finally putting in place measure to help homeowners in danger of foreclosure. The FDIC (Federal Deposit Insurance Corp) has developed guidelines that will “lower a loan’s interest rate, extend the life of the loan or defer payment on a portion of the principal”. The […]
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