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.”

PREVIOUS POST

2012 Budgets

15/10/2011

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

Learn more
NEXT POST

Lower earnings, pensions, hit US consumers

18/10/2011

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

Learn more
More posts
Biden’s Earth Day Summit puts plastics recycling on the fast track
25/04/2021

Plastics has long been the ‘odd one out’ in terms of recycling. Steel, aluminium, glass,...

Read
Pandemic leads to ‘baby bust’ as births decline in most countries
18/04/2021

A year ago, many were suggesting the lockdowns might produce a “baby boom” as couples sp...

Read
Americans hunker down on spending as the pandemic’s impact continues
11/04/2021

US stock markets have been hitting new records recently, as investors swoon over the idea that the $...

Read
Smallpox was the first vaccination to change the world – now we have a new opportunity to improve our lives
03/04/2021

Chart 1: Increased life expectancy led to a dramatic increase in GDP/capita The pandemic has reminde...

Read
COP 26 set to accelerate development of the 15-minute city
28/03/2021

One of the good things to happen in the pandemic over the past year is that ‘cooking has becom...

Read
Circular economy set to replace today’s broken global supply chains
21/03/2021

The Great Freeze in Texas has confirmed once again the problems with today’s global supply cha...

Read
China’s dual circulation policy aims to reduce debt reliance
14/03/2021

Every now and then, people wake up to the fact that debt is only good news when it adds to growth. O...

Read
UK set to take hard line on EU trade under David Frost
21/02/2021

The Brexit debate has always been about politics, not economics.  So it was no surprise that Decemb...

Read

Market Intelligence

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

Learn more

Analytics

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