Home Blogs Chemicals and the Economy

Chemicals and the Economy

Oil tumbles $12/bbl as demand worries increase

Cracks have begun to appear in commodity markets as QE2 ends. Crude oil has now fallen $12/bbl on demand worries since the blog suggested a top might be close. And the Wall Street Journal has confirmed that the super-computers who have driven prices skyward, are now beginning to retire from the party. This builds on […]

US auto buyers shift towards the New Normal

US auto sales remained stable last month. As the chart shows (red line), they were just above the 1.1 million level. Until the Crisis began in 2008, this was the minimum level for monthly sales, but now it seems to have become more of a maximum. Beneath the surface, some other significant changes are underway: […]

Crude oil and stock markets begin to diverge

Financial markets have been fired up over the past 2 years via the arrival of high volume computerised trading. This now dominates market action. And until recently, the US Federal Reserve was happy to finance this activity, via its $600bn QE2 programme. The Fed’s aim was to generate inflation, and so avoid the risk of […]

The end of the US housing dream

Most economists still expect a major recovery in US housing markets. This would be very welcome for chemical companies, as housing represented a $35bn market as recently as 2006, when 2.2m new homes were built. But the above chart suggests they may be over-optimistic. It comes from Yale’s Prof Robert Shiller, who co-founded the authoritative […]

Downturn Alert launches in the blog

They don’t ring bells at market turning points. Otherwise, we could all retire to the Bahamas. But there is growing anecdotal evidence, from chemical buyers and the main retailers, that we may have reached at least a temporary market peak. And Brent crude oil has been stable for 4 weeks at $125/bbl. Equally, since 1970, […]

The other side of the China debate

There are always two sides to every debate. Dow Chemical CEO, Andrew Liveris, clearly has a radically different point of view to the blog’s about the likely outlook for China’s demand. Liveris told analysts in this week’s earnings call that “any indications of high inventories (in China) are likely to be transitory“. As ICB editor […]

Wal-Mart says consumers under “more pressure”

The major retail groups are excellent indicators of future trends in chemical consumption. Since before the Crisis began, consumers have been focusing more on price and value-for money. Now Wal-Mart is reporting that consumers face “more pressure than a year ago“. This suggests that demand destruction is already well underway. And Wal-Mart CEO Mike Duke […]

New Normal seminar in Frankfurt in June

A major demographic shift is underway in the Western population. 253 million babies were born in the 1946-70 period in the G7 wealthiest countries (USA, Japan, Germany, France, UK, Italy, Canada). They have driven consumer spending over the past 15 years, as the majority of them moved into the 25 – 54 age group. This […]

Buy a US home – get a $17k car free

The New Normal has definitely arrived in the US housing market. US new home sales are down 80% from their peak, and builders are getting desperate. Offers in the Chicago area now include a $17k credit for a GM car, when a buyer closes the deal. As the New York Times comments, “a long-term shift […]

China’s empty shopping malls

The South China Mall opened nearly 6 years ago. Nearly 3 times the size of Minnesota’s vast Mall of America in the USA, it supposedly symbolised China’s arrival as a consumer power. But as this Australian TV video shows, the Mall today is virtually empty. As are numerous other shopping malls built more recently. Yet […]

Jump to page: