6 months ago, the blog suggested that normal seasonal demand patterns could resume in 2010. And it optimistically forecast “a strong H1“, on the basis that “consumers should need to restock ahead of the usual Q2 demand peak in autos/construction“. This optimism was based on the American Chemistry Council’s excellent analysis of polymer demand, which […]
Chemicals and the Economy
Chemical company CEOs need to act on high oil prices
Pity your poor Purchasing Director this week. They know the West is having a cold winter, but they have done their analysis and can show you slides, such as the one above from Petromatrix, that indicate the US has the highest stocks of distillates since 1999. In addition, the world has 75mb of distillate in […]
2010 may see seasonal demand patterns resume
The American Chemistry Council’s excellent weekly report contains some potentially good news on the outlook for Q1 demand. Its detailed analysis of US polymer markets (above) suggests customers are currently reducing their inventories. CFO’s presumably assume that the main impact of the housing/auto stimulus programmes is now finished, and are no doubt keen to keep […]
Benzene signals a market top
As regular readers will know, the blog believes benzene is a good leading indicator for chemical demand, due to its widespread use in the industry. Last November saw its price “on the floor“, indicating a major downturn, and it remained there until March, before its price began to “surge” in early April as destocking ended […]
Benzene price surge indicates end to destocking
Benzene is the blog’s favourite leading indicator of chemical industry demand. It is one of the most widely used products and, as a liquid, it is also widely traded. Its recent successes as an indicator include calling a peak on industry profitability, when its prices peaked a year ago. And then it provided early confirmation […]
Destocking follows previous recession experience
Destocking is currently a key issue for the chemical industry. The above chart, from Andrew Sentance of the Bank of England, provides some useful clues as to where we are in the cycle. It shows current performance (the green line) versus the history of stock levels in the recessions of the early 1980’s (blue) and […]
The end of the beginning
Last week’s BASF announcement marked the end of Phase One of the downturn. This began over a year ago, with the first signs of financial crisis. Now, we will move into Phase Two – a long, multi-year recession, which will probably include several bear-market rallies. The end of this “beginning” Phase is seeing a disastrous […]
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