Aromatics markets often lead petrochemical markets, and provide good insight into economic trends. This has certainly been true of PTA (terephthalic acid) and benzene over the past year. PTA demand into polyester and PET is dominated by Asia: benzene’s wide variety of uses means it is a good proxy for industrial production in Europe. Recent developments have been […]
Chemicals and the Economy
BASF warns on outlook; Dow warns on China, ethylene cycle
BASF and Dow Chemical both warned on the outlook when presenting their H1 results last week: BASF CEO Kurt Bock warned, “We have for second quarter in the row in chemicals no growth worth mentioning . . . that is not a gratifying development. We have the impression that there is little growth dynamic at the moment and our customers remain extremely cautious […]
Dow’s CEO says “pre-2008 economy was a bubble”
Now its official. Andrew Liveris, Dow CEO, told CNBC last week that the “pre-2008 economy was a bubble“. And exactly mirroring the analysis of Boom, Gloom and the New Normal, he went on to add that “for a couple of years after 2008, we had a head-fake that the growth might have returned, but it […]
A day in the life of an “activist” fund
A prominent “activist” fund in New York has told Dow Chemical to spin off its performance plastics, performance materials and feedstocks-and-energy units. The news led the blog to imagine a fictional scene in the offices of Activists-R-Us fund last Tuesday morning, as the news came through. Any resemblance to actual events is purely coincidental, as they say in movies. […]
Financial markets jump, but petchems remain slow
Dow Chemical is usually optimistic. 6 months ago, for example, it reported that “our transformed portfolio, underpinned by our cost-advantaged and flexible operations, is now performing at a new level.” Last week, however, Dow reported that Q4 operating rates were down from 81% in 2010 to 72%, and warned it faced “headwinds” in all segments […]
China’s inflation at new high, bank lending slows
The blog continues to worry about signs of a slowdown in China. Major commodity trader, Glencore, said this week “we see a pullback in China and it will continue“. This challenges the views of Dow CEO Andrew Liveris last month, and Rhodia CEO Jean-Pierre Clamadieu – who said last week he saw “no material signs […]
BASF warn on over-expansion and China
The blog was very interested to see a recent ICIS interview with Torsten Penkuhn, BASF’s petchem head in Asia, by Will Beacham. Penkuhn noted: “We are more and more concerned at BASF about an increasing risk of overbuilding once again. We currently see a risk that people are becoming too ambitious, enthusiastic and optimistic. And […]
The other side of the China debate
There are always two sides to every debate. Dow Chemical CEO, Andrew Liveris, clearly has a radically different point of view to the blog’s about the likely outlook for China’s demand. Liveris told analysts in this week’s earnings call that “any indications of high inventories (in China) are likely to be transitory“. As ICB editor […]
Coatings companies focus on carbon footprint issues
The blog has been in the USA this week, speaking at the bi-annual Global Coatings Summit. Coatings sales are worth $75bn globally, and are a key market for chemicals. Interestingly, much of the discussion centred around sustainability. In spite of the downturn, it is clear that consumers are now very focused on carbon footprint as […]
Shared Value can unleash next wave of global growth
GE’s then CEO, Jack Welch, launched the Shareholder Value concept in 1981. It has since led many investors to adopt a purely short-term focus on financial metrics, rather than longer-term opportunities. The only problem is that, as Welch admitted 2 years ago, it was “a dumb idea“. Now, one of the world’s great management thinkers, […]
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