I noted back in February that China is no longer exporting price deflation, and is instead causing global prices for commodities and manufactured goods to rise. A reader has now kindly sent me an interesting report from Credit Suisse, commenting on the potential inflationary impact of new labour laws in China. This is particularly important […]
Chemicals and the Economy
A tale of two outlooks – part 2
In an early blog last July, I marvelled at the contrast between the then upbeat nature of financial markets, and the gloom apparent elsewhere. I suggested that these two views of life couldn’t ‘continue to exist alongside each other for ever’, and suggested that whatever scenario came out on top would ‘have major implications for […]
Russian crude supply ‘peaking’
Russia is the world’s 2nd largest oil producer. And it has been the main source of increased crude production in recent years. Its output rose 58% between 1999-2006, from 6.2mbd to 9.8mbd. Now Lukoil’s VP, Leonid Fedun, has told the Financial Times that he thinks 2007 output will be ‘the highest he will see in […]
Every silver lining has a cloud
I am currently lucky enough to be visiting Asia every month. This also gives me a chance to ‘check the temperature’ as regards people’s outlook on the economy. And I think its fair to say that the mood has moved from optimism to caution. Good news is tempered by its potential downside.
ExxonMobil regains top place
After 5 months, ExxonMobil is once again the world’s largest company by market capitalisation. PetroChina had overtaken it last November, but has since lost half its value in China’s stock market decline. Today, PC is worth $453bn, versus EM’s $455bn. China’s stock market has lost 25% so far this year. But PC has been particularly […]
Inflation worries increase in China, USA
China announced yesterday that inflation had soared again last month, reaching 8.7%, versus the government target of 4.8%. Part of the increase is clearly due to the effects of recent major storms. But with the US Fed likely to cut rates soon, China remains in a difficult position. If it increases interest rates, then the […]
M&S dumps free plastic bags
China’s move last month to charge for plastic bags has now been followed by the iconic UK retailer, Marks & Spencer. Whilst the environmental angle is clearly important, the move also represents a reaction to higher oil prices. Plastic bags are not ‘free’ to retailers, and their cost is now escalating. Restricting this cost, whilst […]
4 issues driving today’s oil price
Quietly, oil has moved back to the $100/bbl level. This is quite different from January, when it first hit the magic $100/bbl number. Financial players had jumped on the trend from November as crude rose above $80/bbl, and then wanted to ‘get out at the top’. Their thinking was that a US recession would reduce […]
The law of unintended consequences
There’s an interesting article on Bloomberg, suggesting that the US Fed’s dramatic interest rates reductions are ‘driving Asia’s governments back to controlled economies’. Its argument is that by cutting rates, Bernanke is ‘limiting his Asian counterparts’ ability to curb inflation’. It goes on to argue that Asian banks cannot now raise domestic interest rates to […]
China exports inflation
China has been a major source of price deflation for the past decade. It is now the world’s leading manufacturer of a whole range of products from microwaves to DVDs. And the rest of the world has benefited from the lower prices that it has provided. But not any more. The attached chart from the […]
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