2013 wasn’t a good year for chemical plant reliability. As I noted a year ago, force majeures (when plants go offline unexpectedly) were close to a record level. Very worryingly, 2014 turns out to have been far worse as the chart above shows, based on the reports in ICIS news: 2014 saw a total of […]
Chemicals and the Economy
Vast amounts of stimulus have not made China “middle class”
Debt can’t make a country middle-class overnight. Even a massive amount of debt can’t achieve this. Even the largest amount of debt in history can’t do this. China’s experience since 2007, when it increased debt four-fold, proves this. As McKinsey have reported, China increased its debt from $7tn in 2007 to $28tn by the middle of […]
Deflation gains: China’s plastics market sees over-capacity
More and more commentators are beginning to recognise that deflation is becoming inevitable in many major economies: China’s producer prices fell -4.3% last month, and its consumer prices rose just 0.8% Eurozone consumer prices fell in December to -0.2%, and are likely to have fallen further in January US prices rose just 0.8% in December and are […]
Mckinsey says global debt now 3x global GDP, and rising
A major new report from consultants McKinsey confirms my concerns over the dramatic increase in global debt levels since stimulus policies began in 2008. As their chart above highlights: Global debt has risen by $57tn to $199tn since 2007, nearly 3x global GDP Government debt is up by $25tn, with three-quarters of this in the developed […]
Oil prices jump 20% in 2 days in SuperBowl weekend coup
An astonishing coup appears to have begun 10 days ago, in the last 45 minutes of trading in US oil markets. Yet we still don’t know who master-minded it, or their full objectives. . What happened to oil prices? Prices jumped 8% in the last 45 minutes of trading on Friday 30 January, taking Brent to $53/bbl and […]
54000 millionaires needed to buy new London apartments
‘Nothing succeeds like excess’. That seems to be the motto of London property developers at the moment. According to researchers LonRes, developers are currently building or planning the staggering total of 54000 new luxury homes in central London. These will all be offered at prices of £1m ($1.5m) and higher, according to the Financial Times. Yet just 3900 […]
US stock markets weaken as bond yields signal deflation is near
Increasing volatility in major Western financial markets suggests they are struggling to maintain their momentum. It is certainly hard to be very optimistic about the outlook for the major Western stock markets this year. The reason is that investors are still failing to think about political risk. They continue to believe, as they did a year ago, […]
Greece and the Eurozone head for showdown over debt issue
We all learnt one crucial lesson from Syriza’s victory in the Greek election last week – voters can halt the European Central Bank (ECB). Or in other words, protest coalitions can trump elite consensus. In places like Spain and France, this effect may not work through immediately, but it is being absorbed. Thus Greece and the Eurozone crisis […]
China’s slowdown hits PE imports from N America and NE Asia
A manufacturing slowdown is now well underway in China, as the latest official and unofficial Indices confirm. The government is mitigating this via its policy of self-sufficiency – which means a steady reduction in the need for imports – as well as by increasing exports of higher value-added products such as polyethylene (PE). PE is the largest volume plastic, used in […]
The world of $100/bbl oil is unlikely to return
Chemical markets are continuing to signal that the world faces major economic challenges in 2015. The chart above highlights developments since August, when I first forecast that oil prices would see major falls, and that the value of US$ would see “a strong move upwards“: Benzene, always my favourite indicator for industrial output, has suffered worst, down 56% (green) Brent […]
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