To assume, as they say is “to make an ass out of u and me”. That was certainly the case last week, when financial markets assumed that China’s slightly better PMI index was a sign that its domestic economy was stabilising. They had temporarily forgotten the key message of February’s Research Note, namely that the government would aim to […]
Chemicals and the Economy
China auto sales depend on lending and property bubble
The above chart is the blog’s simple guide to forecasting China’s auto sales. We know from all the data that most Chinese are far too poor to afford to buy a car out of their income. Average per capita consumer spending in the towns is just $2600/year, after all. While rural incomes are only a […]
China’s PE imports jump 26% as credit bubble peaks
Strange things are happening in China’s polyethylene (PE) market, as the chart shows: Imports suddenly jumped 26% in Q1 (red column) versus last year (green) This would be an extraordinary amount at any time, but especially now with the economy slowing It comes at a time when China’s own production continued to increase, up 8% As a result, […]
China’s polyester market flashes red warning signals
China’s polyester market seems to be trying to tell us something quite important about the real state of China’s economy, as the chart above shows for the main raw material, PTA (terephthalic acid): It focuses on the margin between PTA prices and naphtha feedstock (Singapore basis) Normally this is a premium between $200/t – $300/t as shows […]
Free China outlook webinar on Wednesday
The blog’s recent Research Note on the likely impact of China’s economic reforms has attracted enormous interest. As a result, it will hold 2 free webinars on Wednesday to discuss the outlook in more detail. The webinars will be co-hosted with John Richardson, author of the Asian Chemical Connections blog – and co-author with the blog of Boom, […]
Interesting Quotes (7)
Every now and then, somebody in a senior position says something that really deserves to be noticed. Often this is when they are in a state of Denial. This was the case in the blog’s first post in the Interesting Quotes series, when CitiGroup CEO, Chuck Prince dismissed worries about subprime losses in August 2007, saying: […]
China’s slowdown accelerates as IOUs substitute for credit
The end of Q1 seems a good moment to look back at the position of the benchmark markets in the IeC Downturn Monitor. Compared to previous quarters, there has been surprisingly little movement: Benzene has remained the most volatile, with supply outages temporarily pushing up prices (green line) HDPE has trended higher, but these are […]
Sentiment weakens as US stock markets wait for more QE
Sentiment, as measured by the IeC Boom/Gloom Index has weakened considerably over the past 3 months as the chart shows: It peaked at 12 in November, hitting its highest level since before the 2008 Crisis began (blue column) It then drifted lower in December, before rallying back to 9 in the New Year But now […]
“Reservations are no longer necessary at many high-end restaurants”
Think back a moment to September 16 2008. Newly released transcripts analysed by the Wall Street Journal and Financial Times reveal for the first time what was really going on that day at the world’s most important central bank. Lehman Bros, one of Wall Street’s largest investment banks, had just gone bust. Merrill Lynch, another giant, had […]
Global auto industry sales growth depends on China
Autos remain the world’s largest manufacturing industry, and the single biggest source of demand for chemicals and plastics. According to detailed analysis by the American Chemistry Council, each new US auto is worth $3,539 in terms of sales – and involves a wide range of products including antifreeze, plastic dashboards, bumpers and windows, as well as upholstery […]
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