I recently had the opportunity to attend a workshop organised by Pilko & Associates with leading figures from the private equity (PE) industry. It was fascinating to hear their views on how the current credit crunch is affecting M&A activity. The days when some PE players were acclaimed as geniuses simply for loading up a […]
Chemicals and the Economy
Budgeting for a downturn
The ‘consensus forecast’ for 2008 is very optimistic, as I commented in my post-EPCA note. It says oil will remain at $70/bbl, that debt market problems will be contained, and that petchem margins will remain at 2007 levels. This is unusual, as the consensus is normally a base case scenario, with upside and downside variants. […]
Buffett sells PetroChina
I mentioned PetroChina in the very first blog entry, when the stock was trading at $155 in New York. It seemed to me to typify the new mood of confidence that I was finding as I travelled in Asia on the 10th anniversary of the Asian financial crisis. Little did I think that just 3 […]
Policymakers turn more downbeat
There has been a noted change of tone from leading policymakers in the past few days. Gone is the jaunty confidence that the world economy is ‘fundamentally sound’. This has been replaced by a sense that debt market problems may have a wider impact than first expected. US Treasury Secretary, Hank Paulson, typified the new […]
BP and Reliance
BP and Reliance Industries are both powerhouses in their own fields. BP’s new CEO, Tony Hayward, has just given his first interview in the new job. Comparing, and contrasting, his comments with last week’s AGM statement by Reliance’s Chairman, Mukesh Ambani, is very revealing in terms of content as well as tone. Hayward’s interview in […]
Pricing for profit
The price of a product is a key factor in determining the profitability of producing and using it. And a transparent pricing structure encourages liquidity, which enables price discovery to take place more easily between buyers and sellers. This is why I have long been a supporter of the London Metals Exchange (LME) initiative to […]
Shenhua shares double on IPO
Coal-to-chemicals just took a further step towards becoming a major source of chemical production once again. Yesterday, major coal producer Shenhua Energy listed on the Shanghai stock exchange, and saw its shares jump 93% to value it at $173bn. Shenhua is the world’s second largest seller of coal, after the US’s Peabody Energy, and it […]
US housing worsens
Its now 3 months since we first saw the impact of the subprime crisis. At that time, the main impact was on poor Americans, who were losing their homes. Then, in August, banks stopped lending to each other, causing credit conditions to tighten. By September, central banks were fighting fires on several fronts: • Injecting […]
EPCA 2007
It seems likely that this week’s European Petrochemical Association annual meeting in Berlin will mark a turning point in the petchem cycle. Looking back over 2007, Boy Litjens, CEO of Sabic Europe, told ICIS@EPCA that performance this year had been ‘excellent’, and that they would ‘definitely report the best results ever’. He was also hopeful […]
Dow warns
Dow CEO Andrew Liveris has spelled out very clearly his concerns about the impact of the US subprime crisis and high energy prices. He said that last week’s Fed Funds cut ‘flirted with danger’ in terms of the risks it took with inflation, although it was clearly necessary in order to tackle other problem areas. […]
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