Difficult times lie ahead for global polymer markets, as I note in a new analysis for ICIS Chemical Business. In the short-term it is clear that downstream users have, once again, been busy building stock in recent weeks as the oil price rose. But now, finance directors are getting calls from their bankers asking about […]
Chemicals and the Economy
Surplus chemical industry capacity reaches 26% as demand slows
Global demand is continuing to slow, yet chemical industry capacity is continuing to ramp up. As a result, supply gluts are likely to appear in many key areas as we move into the second half of the year. That is the key conclusion from the latest American Chemistry Council data for global chemical capacity and […]
Chemical industry is the best indicator of EM outlook – and the outlook is not good
Policymakers would be better off following the fortunes of the chemical industry, if they wanted to forecast the global economy, as I describe in my latest post for the Financial Times, published on the BeyondBrics blog Capacity utilisation (CU%) in the chemical industry has long been the best leading indicator for the global economy. The […]
China’s polymer expansions make new US exports hard to place
China used to be the manufacturing capital of the world. It would buy raw materials, and sell finished products to the West. But these volumes are now in decline. The West’s ageing populations already own most of what they need, and their incomes are reducing as they enter retirement. So China’s business model is changing. […]
Brazil’s PE market shifts from import to export as recession bites
4 years ago, Brazil’s polyethylene market flagged up the first warning signs that its GDP was hitting headwinds, as China’s stimulus programme begin to slow. Today, sadly, the economy is in major recesssion, with the impeachment process against President Rousseff adding further pressure: World Bank data shows GDP fell 3.7% last year: it forecasts “only” […]
US ethylene output rise warns of market share battles ahead
“The reality is the US from a chemical standpoint is a very mature market. We have some demand growth domestically in the US but it’s a % or two – it’s not strong demand growth,” Pryor said, adding that polyethylene hardly grew in the US in a decade. “That is not going to change. “The […]
Chemical companies see difficult times ahead in 2016
The chemical industry remains the best leading indicator for the global economy. That much is clear from the warnings it has delivered over the past year: Q3 results in November highlighted the need for “new strategies and business models“ Q2 results in July suggested “continued uncertainty over outlook“ Q1 2015 results in May revealed “increased […]
Force majeures at record level, despite high profits
All accidents are preventable. This simple fact, which used to be top-of-mind for every chemical industry manager, seems to have been increasingly either forgotten or ignored in recent years. The evidence is in the chart above: showing industry force majeures since 2008 (as reported on ICIS news): They were at a record level in 2015, […]
Chemical capacity utilisation continues to weaken
Capacity Utilisation (CU%) is the best measure we have for the current state of the global chemical industry. It doubles as an excellent proxy for the outlook for the global economy. And as the above chart based on latest American Chemistry Council data shows, recovery still seems a long way off: Global CU% was down […]
The blog in 2015
2015 was the year when companies and markets began to feel the impact of the Great Unwinding of stimulus policies. The blog’s readership has increased significantly as a result, as people began to abandon the consensus wisdom which had so clearly failed – once again – to provide a reliable guide to the outlook. The […]
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