Financial markets party whilst petchems remain weak

Chemical companies, Consumer demand, Currencies, Economic growth, Financial Events, Oil markets

Financial markets continued their start of quarter rally last week. But their volatility amazes even seasoned observers. The US Dow Jones Index has moved at least 100 points in 57 of the last 58 days, for example, whilst crude oil jumped $3/bbl on Friday alone.

Of course, the continued correlation between stock and oil markets is ultimately contradictory. Higher oil and feedstock prices can only do further damage to the prospects for economic recovery in the real economy, in which we all operate. The blog discusses this in the above short interview, recorded with ICIS’s John Baker at EPCA.

But the volatility is likely to continue, as long as markets remain dominated by the high frequency traders and their computer games. Reassuringly, though, there are signs that next month’s G-20 meeting might ban at least some of this dysfunctional trading activity. The blog will tip its hat to Andy Haldane at the Bank of England, and his colleagues, if this can be achieved.

The blog was also reassured by news that German chemical firms are studying “scenarios for a recession” as a result of the current financial market turbulence. Henrik Meincke at Germany’s VCI chemicals trade group told ICIS that “Germany’s chemical industry would be prepared” should a recession occur.

ICIS pricing comments this week, and price movements since the IeC Downturn Alert launched on 29 April, are below:

Benzene NWE, down 28%. “An air of nervousness was compounding the softer sentiment across the benzene market, as was the strict inventory management currently in place across the aromatics chain and downstream markets.”
HDPE USA export, down 25%. “Prices continued to fall during the week. One source suggested some prices have been so low, producers might be trying to sell into China.”
Naphtha Europe, down 16%. “Demand remains poor from both the petrochemical industry and the gasoline sector.”
Brent crude oil, down 13%.
S&P 500 Index down 10%.
PTA China, down 8%. “Buyers had no confidence to purchase cargoes because of poor downstream sales.”


2012 Budgets


The blog will publish its fifth annual Budget Outlook next weekend. As usual, it...

Learn more

Lower earnings, pensions, hit US consumers


Wall Street analysts have their bonuses to consider at this time of year. So it ...

Learn more
More posts
G7 births hit new record low, below Depression level in 1933

If a country doesn’t have any babies, then in time it won’t have an economy. But that...

From subprime to stimulus…and now social division

The blog has now been running for 12 years since the first post was written from Thailand at the end...

Resilience amidst headwinds is key for H2

Resilience is set to become the key issue as we look forward to H2, as I note in a new analysis for ...

Perennials set to defeat Fed’s attempt to maintain the stock market rally as deflation looms

Never let reality get in the way of a good theory. That’s been the policy of western central b...

Europe’s auto sector suffers as Dieselgate and China’s downturn hit sales

Trade wars, Dieselgate and recession risk are having a major impact on the European auto industry, a...

2019 Global Outlook – a mid-year update: ACS webinar on Thursday

There will be no shortage of important topics to discuss on Thursday, at my regular Chemistry and t...

Recession risk rises as Iran tensions and US-China trade war build

Oil markets are once again uneasily balanced between two completely different outcomes – and o...

Smartphone market decline begins to impact global stock markets

The bad news continues for the world’s smartphone manufacturers and their suppliers.  And Pre...


Market Intelligence

ICIS provides market intelligence that help businesses in the energy, petrochemical and fertilizer industries.

Learn more


Across the globe, ICIS consultants provide detailed analysis and forecasting for the petrochemical, energy and fertilizer markets.

Learn more

Specialist Services

Find out more about how our specialist consulting services, events, conferences and training courses can help your teams.

Learn more

ICIS Insight

From our news service to our thought-leadership content, ICIS experts bring you the latest news and insight, when you need it.

Learn more