The blog prefers to be optimistic. But 30 years in the chemical industry has taught it to be extremely realistic. So its motto for 2009 Budgets is ‘batten down the hatches’. Chemical companies are likely to be sailing in some very rough seas, with treacherous currents and plenty of dangerous rocks. Survival, not growth, is […]
Chemicals and the Economy
Returning Boards to their proper role
Today sees a supportive follow-up in the Financial Times to yesterday’s posting about LloydsTSB, and its willingness to rebuff those who parroted the ‘shareholder value’ mantra. The man who led the bank’s director development programme reveals that its former Chairman, Sir Brian Pitman, ‘drummed into us that the board’s main focus was to ensure continuing […]
OPEC bites the bullet
Events have moved quickly in oil markets in recent days. Last week, when oil was at $80/bbl, the blog argued that OPEC risked having to defend a $50/bbl price, by delaying production cuts until its 18 November meeting. Last night, OPEC signalled it agreed with this analysis, announcing that the meeting would now take place […]
Recession almost certainly now underway
Asian naphtha spreads versus crude oil have fallen to all-time lows. Dubai crude was reported at c$80/bbl last week, whilst naphtha was $30/bbl lower, at a price of only $50/bbl. This shows an extreme lack of demand for naphtha, and hence for petrochemicals. In turn, this is a leading indicator of economic downturn. ICIS news […]
The dying days of the ‘shareholder value’ cult
On Monday, governments announced c$3.5 trillion of recapitalisation and capital injection into the global banking system. One would have then expected the major investment institutions to rally round in support. But on Wednesday, they conspicuously failed to do this. Instead they argued that the taxpayer should provide yet more money, in the form of dividends […]
OPEC tries to hold $70/bbl oil
OPEC has called an emergency meeting for 18 November to discuss measures to combat collapsing oil prices. But as the blog noted last week, by then they could be looking to defend $50/bbl. And it seems Saudi Arabia agrees. Market reports suggest ‘the world’s top oil exporter has already started cutting oil supplies to European […]
The aptly named Mr Darling
In August, the blog welcomed the statement by UK Finance Minister, Alistair Darling, that the ‘global economy was at a 60-year low’. It noted that he was ‘the first western politician to abandon reassurance and instead to focus on the reality of current problems’. But it still took until last weekend before all the relevant […]
The deleveraging tsunami continues
Sir Fred Goodwin, CEO of RBS, was one of the poster boys of the new banking model. Along with his peer group, he preached the virtues of the ‘efficient balance sheet’. Equity was for wimps. The blog warned over a year ago that the ‘seeming genius’ in recent years of people such as Sir Fred […]
Ineos to sell some US assets?
The UK’s Sunday Telegraph newspaper reports that ‘Ineos, the chemicals group which is one of Britain’s biggest private companies, is considering selling assets in an effort to reduce its debt burden’. It adds that ‘the company, which has expanded rapidly through debt-fuelled acquisitions, is understood to be looking at disposing of a number of businesses […]
EU agrees bank rescue
Finally, as the blog noted with relief last week, there is a workable plan on the table to rescue the global banking system. On Saturday, the IMF warned of potential ‘meltdown’ if the plan was not approved. In the blog’s view, they were right to do so. Yesterday’s EU meeting could not afford petty politics […]
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