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Chemicals and the Economy

US housing, China storms hit chemical demand

Andrew Liveris, Dow’s CEO, commented today that Dow now have ‘a total clampdown on costs and capital expenditure’. Whilst other CEO’s told the Financial Times that ‘rising oil prices, sagging consumer confidence and the on-going credit crunch’ are causing them to put in place ‘contingency plans to protect against the expected economic downturn’. Separately, Bill […]

Winter storms batter China’s economy

On my regular trip to Asia, the major news is the snowstorms battering China. These started on 10 January, and are expected to continue for at least another week. The transportation system seems to have ground to a standstill in many areas as a result. and so essential coal and food supplies are not reaching […]

IMF identifies ‘serious slowdown’

The credit crunch and associated debt crisis has elicited an unprecedented response from the International Monetary Fund (IMF). Today, the head of the IMF, Dominique Strauss-Kohn, told the Financial Times that the new IMF economic forecasts would ‘show a serious economic slowdown that needs a serious response’. Just last autumn, the IMF was calling for […]

CEO confidence falls

CEOs seem to be following CFOs in worrying about the impact of the credit crunch and debt crisis. The annual CEO survey by PwC of 1150 executives shows that fears of a downturn now top their list of concerns. US CEOs are much less confident than a year ago, with only 35% now ‘very confident’ […]

Polymer margins retreat

The new ICIS Weekly Margin report on polyethylene is a goldmine for those who want to track the fortunes of the petchem industry. The recent issue contains good news and bad news for producers: • The good news is that PE margins have improved during January for integrated producers as a result of lower feedstock […]

Selling the rallies

Stock markets are usually good indicators of future economic conditions. Their savage downturn since the start of the year suggests that investors now feel a growth slowdown is almost inevitable. Barrons (the major US investment paper) today highlights another very worrying development. It notes that ‘selling rallies aggressively is (now) more fruitful than buying every […]

2008 crude outlook

I had the opportunity last night to learn current thinking within the oil industry on the current outlook for oil markets, by attending the annual lecture of the British Institute of Energy Economists, kindly hosted by BP. A year ago, at the same event, the crude price was $51/bbl. Last night, the headlines were ‘major […]

Forecasting crude oil prices

I have often wondered how the major investment banks arrive at their forecasts for long-term crude prices. Last night I found out how it is done at the biggest player, Barclays Capital. Dr Paul Horsnell, Head of Commodities Research, said that when he started in the role in 2003, he began by keeping close to […]

The zeitgeist changes

The German word ‘Zeitgeist’ describes ‘the ethos or mood’ of a select group of people. And the financial zeitgeist is clearly changing. Back in August, I marvelled at the contradictory views then being expressed: ‘We see a lot of people on the Street who are scared. We are not scared. We are not panicked. We […]

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