Today’s 419 point fall on the Dow Jones Average, and $6/bbl fall in WTI crude oil prices, may not be just another example of the wild volatility that has come to seem normal in financial markets. It may also mark the end of an era. Since 1994, the US Federal Reserve has used all its […]
Chemicals and the Economy
High Frequency Trading dominates as markets crash
The blog was almost alone at the end of April, when it launched the IeC Downturn Alert. Today, its fear that we are close to a global downturn has become mainstream. As the American Chemistry Council report, “fears of another global recession are rising with several noted forecasters raising the chances of another recession to […]
Chrysler warns of China threat
Chrysler CEO, Sergio Marchionne, has issued a wake-up call to Western auto companies about the growth of China’s exports. He warns that they “can’t count on dramatic growth in Asia to drive prosperity“, and suggests that China’s plans to increase auto exports pose an “enormous” risk. Meanwhile, US auto sales disappointed again in July. As […]
Markets fall as politicians argue
The blog’s IeC Downturn Alert is now 3 months old. The aim was to provide enough time for readers to develop robust contingency plans, as a new global downturn became more and more likely. A key issue is that dysfunctional political systems in the eurozone, USA and China seem unable to deliver sensible solutions to […]
Q2 chemical results raise concerns about the outlook
The blog’s quarterly review of company results shows a considerable shift in mood since May. Then, many analysts were completely fooled by the short-term support provided to margins by higher oil prices. And only Peter Huntsman warned about the risks of high oil prices, unemployment and economic fragility. Q2 results show many more companies adopting […]
Bayer and Shell to speak at Amsterdam Conference
We have another strong speaker line-up for our 10th European Aromatics & Derivatives conference on 22-23 November in Amsterdam, co-organised as usual with ICIS. Patrick Thomas, CEO of Bayer Material Science, will talk about the outlook from the viewpoint of a major global aromatics consumer. Alexander Farina, GM strategy for Shell Chemicals, will give his […]
China’s PE market down 2.5% in H1
China’s surging demand led the chemical world out of recession and into boom territory. Its 53% increase in polyethylene (PE) demand between 2008 – 2010 (up 6.2 MT), was typical of the support it provided. But H1 2011 has not maintained this momentum, as the chart shows. Its PE demand was actually down 2.5% versus […]
Oil prices distorted by Wall St’s computer trading
Crude oil and commodities markets have lost touch with the fundamental realities. This didn’t just happen yesterday, but began a decade ago. That’s the argument put forward by my co-author, John Richardson, in the latest chapter of our new free eBook, ‘Boom, Gloom and the New Normal – how the Western BabyBoomers are changing chemical […]
BASF warns on the outlook
Last month, the blog suggested that CEOs might want to warn investors of the threat to earnings from high oil prices, unemployment and economic fragility. BASF, the world’s largest chemical company, have done exactly this today. New Chairman, Dr Kurt Bock warned: “The economic risks remain: We continue to be concerned about the development of […]
Oil markets set up another ‘triangle’ pattern
As promised yesterday, the blog looks today at the impact of high frequency trading (HFT) on oil markets. This now takes place in micro-seconds. It is algorithm-driven via ‘black boxes’, and so fast that as Andy Haldane of the Bank of England notes: “Around 40,000 back-to-back trades can take place in the blink of an […]
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