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Chemicals and the Economy

India’s WTO veto marks end of global trade deals

The Cycle of Deflation has taken another lurch forward.  The reason was India’s decision to veto last year’s Bali deal to streamline customs procedures.  Almost certainly, this will prove the dying effort of the World Trade Organisation, which sponsored the proposal. The blog is particularly sad at this outcome.  It has always believed that free […]

Eliminating the impossible in China’s polyethylene market

Very large amounts of copper, iron and other commodities are in long-term storage in China as part of the ‘collateral trade’.  More recently, it seems large amounts of polyethylene (PE), ethylene glycol (MEG) and probably other chemicals have also started to be used for the trade. None of this used to matter when the Chinese economy was booming.  Why […]

China’s housing market enters New Normal as prices slide

Markets appear to be continuing to move, slowly but surely, into their expected ‘scary phase’.  The reason is the massive distortions that have been created in financial markets, and in China’s housing market, by the $35tn+ of stimulus from governments and central banks since 2009. Unwinding these distortions will not be simple.  The stimulus has not returned us […]

Markets slip as fears grow Fed’s cheap money may end soon

Western financial markets are getting nervous that the US Federal Reserve will cut off their supply of cheap money.  They went through the same panic in 2011.  Now they again have to wait to see what happens. The chart of the new IeC Boom/Gloom Index above highlights the parallels: Markets were strong through April 2011, with the […]

China’s low-cost smartphones start to dominate global market

China’s exports are growing again.  But not because SuperCycle levels of demand have returned in the West. Instead, its companies are using their low-cost manufacturing model to take on and beat Asian and Western giants.  Developments in the global smartphone market highlight the rapidity of the change underway They confirm China’s economy is moving in exactly the […]

GM focuses on low-cost autos, as European sales remain weak

Low growth and low-cost have become the dominant features of Europe’s auto market. Europe’s modest rise in auto sales continued in June, with volumes up 4.5% versus 2013.  But as the auto association reminds us, this “is the second lowest level in the month of June since reporting began in 2003“.  And the detail of the […]

China condom sales droop 1 million/day on anti-graft campaign

Condom sales have dropped by 1 million/day in China according to The Economist magazine.  It highlights how: Across China, luxury retailers and fancy restaurants are suffering from an edict against wasteful government spending. A chill has crept into karaoke parlours and brothels; mistresses also face a hard time. The reason is the new leadership’s anti-corruption […]

Slide in Q2 operating rates is bad omen for H2 economic outlook

The chemical industry is the best leading indicator for the global economy.  The slide in operating rates (OR%) around the world during the seasonally strong Q2 period. is a clear warning that global economic growth may be stalling. This should be a major wake-up call for anyone still hoping that growth may recover to the Boomer-led SuperCycle level.  The latest update from […]

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