Protectionism continues to build, as unemployment rises around the world. ICIS news reports China has imposed tariffs of up to 36% on nylon 6. BASF will suffer a 30.4% tariff on US exports, and Honeywell 36.2%. Last month, of course, the US hit China with a 35% tariff on tyres. The threat of more duty […]
Chemicals and the Economy
Oil hits $80/bbl
The blog should award itself a pat on the back, now its May forecast of $80/bbl crude has come true. And it is pleased to maintain its 100% record in forecasting the direction and level of oil prices. But it still regrets the lack of substance behind the so-called ‘correlation trade’ between oil, the US$ […]
Beth Tweddle, world champion
The blog sends its congratulations to Beth Tweddle, new world champion in the gymnastic floor exercises. It had the pleasure of working with her father, Jerry Tweddle (now with Ineos), for many years at ICI. Beth is everything that a world champion should be. A video of her winning performance (possibly made by Jerry?) can […]
Free Webinar next week on the Budget Outlook
The blog’s new Budget Outlook is an independent view of the key issues which will impact chemical sales and margins in 2010. Previous Outlooks have stimulated much debate within the industry. We are therefore proposing to run a free 1 hour Webinar next week for blog readers, on Thursday 29 October at 15:00 GMT (16:00 […]
Budgeting for a new normal
2010 should be a better year for the chemical industry, as demand grows in line with a recovery in global GDP. But a quick V-shaped return to the 2003-7 Boom years in terms of volumes/margins seems unlikely. Governments will worry about budget deficits, and may well scale down support for critical end-uses such as autos […]
Housing markets to be slow next year, US Fed
In 2006, there were 2.2 million US housing starts. These were worth $35bn of chemical sales. Currently, and even with the support of an $8k tax credit, they are running at an annual rate of just 600k, worth $10bn. This is the lowest level since records began in 1960. Even in 1975, 1981 and 1981, […]
European refining margins drop 85%
Our major Feedstocks for Profit Study last year foresaw difficult times ahead for European refiners. Now it seems this forecast by our partners, refining experts Wood Mackenzie, is coming true. Total, Europe’s largest refiner, today reported that European refining margins fell 85% in Q3, to just $6.60/bbl, the lowest level for 7 years. And they […]
China gains as world trade slows
Sometimes a picture is worth 1000 words. The chart above, from the New York Times, highlights the massive changes that are taking place in world trade flows. These are of critical importance to the chemical industry, one of the world’s most globalised businesses. • Firstly, the volume of world trade has fallen to 2006 levels, […]
The concept of “escape velocity”
This being Budget Week in the blog, it seems appropriate to look at the views of Larry Summers, US economics chief, to understand his expectations for an economic recovery. His main concept is of “escape velocity”, whereby the economy will escape from the downturn like a 3-stage space rocket: • Government spending stops the downturn […]
“New normal” means major change – US Fed
The blog has argued for some time that the chemical industry is facing a “new normal” as growth returns to the economy. Now US Federal Reserve Governor Dan Tarullo has helpfully spelt out some important changes that he expects to occur. He notes that: • “Just about everyone understands we will never return to the […]
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