When the world changes, companies either change with it or go out of business. The market for stagecoaches was never the same once cars came along. And not many students use slide rules today, now calculators are available. Usually, of course, these market changes are slow-moving. So companies often fail to respond in the hope the old world […]
Chemicals and the Economy
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 […]
Boom/Gloom Index hits record high as western financial markets soar
The best view is always from the top of the mountain. At least that is how it feels today, with this month’s IeC Boom/Gloom Index (blue column) hitting a record high. Nor it is alone, as the S&P500 (red line), the world’s most important financial market index is also at record levels. Central banks broke […]
Global chemical operating rates remain well below SuperCycle levels
The latest American Chemistry Council report on global production shows output was up 3% versus September 2012, and just 18% above average 2007 levels. There was a mixed picture in the main Regions: Asia-Pacific was strongest, up 5.9%, with Japan accelerating as the weak yen helped its exports The Middle East continued to slow, and was up […]
Grangemouth closure could force downstream converters to shut
One never wants to see a major petchem plant shutdown, especially one with the history of Grangemouth in Scotland. It is the UK’s largest cracker site, with ethylene capacity of 1 million tonnes. Its production has a sale value of $1bn ($1.6bn), and a final value in food packaging, consumer packaging and automotive parts of […]
Warning flags fly over Europe’s olefin business
2012 was another difficult year for the European olefin industry. As the chart above shows, based on official APPE data, total ethylene volume was just 18.9MT. This was only just above 2009’s 18.8MT. Before that, we have to go back to 1997 to find an equivalent annual volume. And then the industry was still growing […]
Europe’s olefin operating rates remain at recession levels
Europe’s political leaders were deadlocked last weekend over plans for the EU’s new Budget. A new north-south gap opened up, where the major contributors to the Budget (Germany, UK, Netherlands) demanded €30bn ($39bn) in cuts. This was, of course, badly received by those in the south (Italy, Spain, France) who would like more support. This […]
3 issues, and an overview, at EPCA
This year’s European Petrochemical Association in Berlin was notable for its realism. The blog gave an interview to ICIS news which was headlined ‘Major recession ahead, warns leading consultant’. This overview seemed to capture the overall mood of the event. 3 key issues were also the focus of intense discussion: US shale gas. Will all […]
Sinopec focuses on political and social targets
Sinopec is China’s main company in refining and chemical markets. Although it is listed on world stock markets, the government remains its largest shareholder with a 76% stake. As such, it follows government priorities rather than western commercial logic. The chart above, from the blog’s major new study of the company, highlights some of the […]
Petchem volumes slide in all 3 major regions
Volume is a key driver for chemical company profits. High volume means operating rates increase, reducing unit costs. Companies also gain more pricing power. But when volume is low, the reverse happens. Thus the above chart from leading analyst Paul Satchell of Collins Stewart is telling an important story. It shows: • Volumes were very […]