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Chemicals and the Economy

Russia’s chemical production continues to grow

Russia has been the great exception in regional chemical markets. Normally, production growth starts at a high level, often 15% a year or more, and then slows as markets become more mature. But in Russia, output collapsed with the Berlin Wall after 1989, and growth was actually negative until the mid-2000s. Since then, there has […]

Financial markets jump, but petchems remain slow

Dow Chemical is usually optimistic. 6 months ago, for example, it reported that “our transformed portfolio, underpinned by our cost-advantaged and flexible operations, is now performing at a new level.” Last week, however, Dow reported that Q4 operating rates were down from 81% in 2010 to 72%, and warned it faced “headwinds” in all segments […]

Markets wait to see what happens next

‘Would you buy, or would you sell?’ is always an interesting question in any market. Petchems provide a particularly balanced answer today. • Buy arguments include – China’s buyers will return from holiday, and will need to restock; gasoline markets are tightening after the Petroplus bankruptcy; bad weather is causing some disruption • Sell arguments […]

“All news is good news” for China’s GDP slowdown

There is no arguing with markets when they are being driven by sentiment, either positive or negative. Last week’s news of China’s slower GDP growth gave rise to opposite interpretations in Asia and the West – but news media reported both were seen as firmly positive: • In Asia, markets “jumped… after news that Q4 […]

Uncertainty grips New Year trading

Markets are worryingly quiet for the start of a New Year. There is some restocking underway, but the main interest lies in the crude oil market. Since Brent peaked in April, there has been a clear pattern each month: • Prices have peaked at the start of almost every month • The only exceptions have […]

Record high oil prices hit demand

The blog is quite surprised at the mainstream media’s lack of interest in the fact that average Brent oil prices were at record levels in 2011 in real terms (adjusted for inflation). The annual average of Brent prices recorded by the US Energy Information Administration was $111.26/bbl, well above even 2008, when Brent prices peaked […]

2011 saw ‘long-drawn out fundamental downturn’ begin

The chart above shows how the benchmark products in the IeC Downturn Monitor moved during 2011. The yellow shaded area covers performance since 29 April, when the Monitor launched. It shows a year of two halves: • The period to the end of April was the last time that governments embarked on major ‘stimulus efforts’. […]

IMF warns of protectionism, and possible Depression

Whisper it softly, so as not to alarm the CEO. But the world is starting to look worryingly like the picture of mid-2008. Official bodies such as the IMF are always cautious in forecasting a downturn. They rightly worry that they could help to cause the decline, by hitting confidence. But there comes a moment […]

DuPont warns and stresses “productivity initiatives”

By now, companies should be reordering for the New Year. CFOs have achieved their working capital targets for year-end. And the commercial people should be planning Q1 sales. So far, however, it seems that this restocking has proved rather weak. This parallels September’s disappointment, when the return from the summer holidays also failed to produce […]

Petchem trading slows as holiday period nears

The blog was in Singapore last week, running the final New Normal workshop of the year with co-author John Richardson. The main topic during the breaks was the continuing concern over China’s demand. This is reflected in the latest Downturn Monitor above. On the positive side, China’s PTA prices improved due to hopes of easier […]

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