Imagine that 5 years ago, you had been asked by your Board to forecast future oil prices. And suppose you had prepared a forecast which said: Oil demand growth will slow in the West, as cars become more fuel-efficient and ageing populations drive less Demand growth in the emerging economies will be supported temporarily by real estate […]
Chemicals and the Economy
Ethylene prices have 96% correlation to oil prices
Companies are about to review their Q1 performance, and re-forecast profit and revenue for the rest of the year. Most will be disappointed with results so far, as the long-promised economic recovery has again failed to appear. This will be no surprise to blog readers. But there is another and connected issue for Management Teams to worry […]
Aluminium shortage “temporary and artificial” says world’s largest buyer
When was the last time you told your customers that they would have to wait 570 days for delivery of material for which they have already paid? You’ve never done this? Well, you need to take lessons from those super-smart people who own the aluminium warehouses, such as Goldman Sachs (pictured above by Reuters). As the blog […]
“The policy Kings/Queens have no clothes”
There seems almost no need to publish a forecast for 2014. Policymakers have toured the TV studios to confirm that this is finally the year of recovery. They admit it may have taken nearly 5 years longer than first expected, and that there have been numerous ‘false dawns’ on the way. But now, they are certain that […]
Demand now the key driver for future US petchem profitability
Will the US be able to sell all its planned new petchem volumes? That is the 3rd topic in the blog’s series about critical areas where we all think we know what’s happening, but may end up being surprised. We all know that the US now has a major feedstock advantage versus Europe, Asia and Latin America due […]
US shale revolution puts squeeze on European chemicals groups
The Financial Times has carried an excellent analysis this week of the key shale gas issues facing the European chemical industry. It includes comments from a number of CEOs, as well as from the blog. Its key points are as follows: THE STRATEGIC DILEMMA “European petrochemical makers risk being squeezed between low-cost producers in the Middle East […]
US polyethylene and PVC exporters focus on margin, not volume
2013 has seen 3 types of markets develop for the blog’s IeC Downturn Monitor portfolio as the chart above shows: Financial assets such as the S&P 500 (purple) have soared, as did the US$ against the yen (orange) Crude oil (blue) and naphtha (black) tried to follow, but found it difficult to pass though the higher prices Benzene (green) and […]
Iran talks offer hope on oil prices
Iran has been at the centre of all the major oil market price spikes in the past few decades: Today’s record prices on an annual basis are partly due to market fears over supply disruptions due to the Iran/Israel nuclear issue Fears over a nuclear showdown also led prices to jump to $150/bbl in July 2008, when the […]
Benzene markets suggest BabyBoomer growth will not reappear
Benzene has always been one of the blog’s favourite leading indicators for the global economy. The reason is simple, in that it has been around a long time, and is now used in a very wide range of industries. So it provides us with a broad-based picture of the global economy. The chart above highlights another important […]
High-frequency trading continues to take markets higher
The blog was very pleased to see the Nobel Prize awarded jointly to Robert Shiller, whose words of wisdom on housing and stock markets it has cited many times. Shiller’s key insight, in his book Irrational Expectations and since, has been to confirm Ben Graham’s famous saying: “In the short term, the market is a […]
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