3 years ago, many hoped the G20 group of the world’s wealthiest countries might work together to solve the global financial crisis. Last week’s Cannes meeting ended that illusion. Instead, its decision to abandon the Doha trade round, launched in 2001, made it clear we have passed the high-water mark of globalisation. This conclusion was […]
Chemicals and the Economy
Risks rise over future growth in China and India
Many chemical companies now believe it is inevitable that China and India will reach developed economy status. Some even believe that their strong growth will mean “the end of economic cycles”. But as we discuss in chapter 6 of ‘Boom, Gloom and the New Normal’, the new International eChem/ICIS eBook, there are three major risks […]
China’s subsidy end boosts September’s auto sales
Auto sales in the key global markets of China, USA and Europe present a mixed picture as we look towards year-end (red square): • China had a strong September, and sales are now up 6% versus 2010 • But the Auto Association claimed this was due to a last minute rush of orders caused by […]
EPCA attendees worry about China slowdown
China was understandably a key item on most people’s minds at this week’s annual EPCA (European Petrochemical Association) meeting in Berlin. It has been the motor of global chemical demand growth over the past 3 years. The blog’s discussions identified a number of signs that this support may be disappearing: • Many companies worry about […]
US, China, EU auto sales stall
Auto sales in the world’s 3 main markets (China, USA, EU), saw much slower growth in the past 3 months. The chart above shows how they have moved in 2011 (red square) versus previous years. It is clear that the stimulus-led boom seen since 2009 has come to an end: • Overall, sales in the […]
Global economy weakens as China oil demand drops
There seems little doubt that the global economy is now entering a new downturn. Pessimists may worry that it has already begun in Q3. Optimists might hope it will be delayed till Q4, or even Q1. But almost all major indicators are pointing in the same direction. • On the macro-level, the latest American Chemistry […]
China’s lending continues to tighten
Financial bubbles are like balloons. Only instead of air, they need to be constantly pumped up with new lending. Otherwise they begin to deflate, and the Minsky Moment occurs. The above chart of China’s bank lending shows, as discussed last month, that the Minsky Moment is getting close. August’s lending (red square) was exactly the […]
China heads for 45% over-capacity in autos by 2013
China’s auto market growth has clearly stalled. As the chart above shows, August figures (red square) continued the trend of recent months, and were only 5% above 2010 levels (brown line). Rao Da, head of China’s automotive association, also repeated his warning that “there is no sign of a market recovery“. The reason is not […]
Sinopec adds capacity as China’s ethylene growth stalls
Sinopec is China’s leading petchem producer. Its H1 results, out this week, confirm the blog’s concern that China’s growth surge has stalled. The chart shows Sinopec’s view of domestic demand growth for ethylene (blue line). After falling to zero in 2008 as the Great Recession began, growth rebounded to ~10% in 2009-10. But in H1 […]
August highlights
Many readers have been taking a well-earned break over the past few weeks. The blog also continues to gain large numbers of new readers, as the financial crisis intensifies. As usual, therefore, it is highlighting key posts during August, to help you catch up as you return to the office. Boom/Gloom Index suggests markets on […]
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