Imagine that 5 years ago, you had been asked by your Board to forecast future oil prices. And suppose you had prepared a forecast which said: Oil demand growth will slow in the West, as cars become more fuel-efficient and ageing populations drive less Demand growth in the emerging economies will be supported temporarily by real estate […]
Chemicals and the Economy
Global auto industry enters “peak car” era
Q1 saw record global auto sales volumes, as the chart above shows: US and EU manufacturers cut prices and offered great financing deals to boost sales Chinese buyers raced to beat new quota restrictions on the main cities Japanese consumers brought forward purchases ahead of April’s sales tax increase Only India disappointed of the 5 major markets, […]
China’s polyester market flashes red warning signals
China’s polyester market seems to be trying to tell us something quite important about the real state of China’s economy, as the chart above shows for the main raw material, PTA (terephthalic acid): It focuses on the margin between PTA prices and naphtha feedstock (Singapore basis) Normally this is a premium between $200/t – $300/t as shows […]
Ageing populations create repayment risk for government bonds
Government bonds in the larger, wealthy countries of the West have traditionally been regarded as being “risk-free”. Most countries have failed to pay their debts at some time in the past, but it hasn’t happened in the post-War period for the major economies, and so investors have forgotten this can happen. This situation may well change […]
EU auto sales boosted by 25% discounts and financing deals
When is a car sale not a car sale? That’s the question that has been bothering the blog in the past few weeks. Of course, it wants to cheer the news that EU auto sales have seemingly recovered. But as the chart above shows, the recovery is still very limited: Q1 sales at 3.25m (red […]
Caustic soda inventories rise as aluminium cutbacks begin
An accident waiting to happen is perhaps the best way to describe aluminium markets – the key swing outlet for caustic soda. Caustic soda is normally a late cycle product, with sales then focused on the mining industry. Industry leader Alcoa’s results confirm the disappointing trend. It lost money in Q1, whilst revenue fell 8% due to a decline […]
Half of all Asians still living below $2/day poverty line
The good news is that the world’s development agencies are waking up to the idea that income level is going to be key to future world growth. They are also starting to recognise that the vast majority of people in the emerging economies are not “middle-class” with near-Western standards of living. Thus a major new Study from the […]
High-frequency traders pay $millions to be legal highwaymen
In olden days, highwaymen would hang around stagecoach inns, waiting to see when wealthy people were travelling. Then they would hide out along their likely route, getting wet and cold, in order to take their cash. Today the arrival of electronic trading has changed all this. High-Frequency Traders (HFT) now have computer programmes to act as their lookouts, […]
Free China outlook webinar on Wednesday
The blog’s recent Research Note on the likely impact of China’s economic reforms has attracted enormous interest. As a result, it will hold 2 free webinars on Wednesday to discuss the outlook in more detail. The webinars will be co-hosted with John Richardson, author of the Asian Chemical Connections blog – and co-author with the blog of Boom, […]
“It’s worse than 2007, because then it was a problem of the developed economies”
William White was the only central banker to publicly warn of the risks to the world economy long before the Crisis, when he was chief economist of the Bank for International Settlements (the central bankers’ bank). He also warned of the problems that would be caused by their stimulus programmes as early as September 2009. A blog […]
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