Europe’s plastic industry is at a critical turning point. Profitability is falling as the recession bites. But it cannot just cut back and hunker down. Instead, it has to take a lead in building major new recycling capacity as today’s markets and feedstocks start to disappear.
Chemicals and the Economy
World Bank, IMF warn of famine risk as Russia’s war hits wheat output and hikes fertilizer costs
Essentially, the problem is a timebomb which is set to explode next winter unless governments work together to increase arable planting, establish emergency stocks, and subsidize fertilizer costs whilst gas prices remain at today’s record levels.
Ukraine, pandemic, herald major market shifts
Energy and financial markets are exacerbating the risks ahead. Oil prices at current levels – as the chart confirms, they now account for more than 3% of global GDP – have historically led to recession as the chart shows. The reason is that consumers have to cut back on their discretionary spending, which drives economic growth, in order to heat their homes and travel to work and school. Today’s high levels of natural gas prices add to this risk.
Prepare for a K-shaped recession with Winners & Losers
This is why we are facing a K-shaped recession. Companies and investors have a difficult time ahead. They not only have to navigate a potentially major downturn. But they also have to completely reposition their portfolios for the New Normal world that will follow.
IEA issue 10-point plan to cut oil demand – and promote Electric Vehicles and recycled plastics
These are difficult times, and there is no guarantee that they may not get worse. But they also remind us of the critical need to move beyond the Age of Oil, and develop more sustainable energy resources for the future.
Oil markets, OPEC, enter the endgame for the Age of Oil
2 major events shocked oil markets last week. They marked the start of (a) the endgame for the Age of Oil and (b) the paradigm shift to the Circular Economy and the new Age of Energy Abundance. The new ‘Net Zero by 2050’ report from the International Energy Agency (IEA) was the first shock: It […]
Iran highlights OPEC’s dilemma on output cuts
Saying you “won’t do something” may stop you digging a bigger hole for yourself. But it doesn’t help in deciding what you should do instead. That’s OPEC’s dilemma today on raising oil output. Everything seemed simple enough a year ago, as the pandemic took hold: Saudi Arabia’s first reaction was to assume it would have […]
Automakers face stiff headwinds in big emerging markets
Brazil, Russia, India and China disappoint as manufacturers face investment demands of EVs © Bloomberg Less than a third of China’s 31,000 auto dealers were profitable in the first half of 2019, as I describe in my latest post for the Financial Times, published on the BeyondBrics blog Auto markets in the Bric countries are […]
Oil market weakness suggests recession now more likely than Middle East war
Oil markets remain poised between fear of recession and fear of a US attack on Iran. But gradually it seems that fears about a war are reducing, whilst President Trump’s decision to ramp up the trade war with China makes recession far more likely. The chart of Brent prices captures the current uncertainties: It shows […]
Déjà vu all over again for oil markets as recession risks rise
Back in 2015, veteran Saudi Oil Minister Ali Naimi was very clear about Saudi’s need to adopt a market share-based pricing policy: “Saudi Arabia cut output in 1980s to support prices. I was responsible for production at Aramco at that time, and I saw how prices fell, so we lost on output and on prices […]
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