UK interest rates have just been cut by 1.5% to 3%. They were last at this level in 1955. The Bank of England had been very concerned about inflation, currently at 5.2%, compared to a target of 2%. But the Bank now sees no danger from inflation in the future. Instead, it is warning that […]
Chemicals and the Economy
GM – “time is very short”
Earlier this week, the blog noted GM’s dire October performance, with its US sales down 45% on last year, following the ending of its price promotions. Now, Roger Altman, the former US Treasury official who is advising GM on its loan application, has told Bloomberg “time is very short” to avoid its collapse. Normally it […]
Obama wins, Bush stays in office
Sen. Barack Obama duly won a landslide victory in yesterday’s US Presidential election, but will not take office until 20 January. I suggested last month in ICB, that “this delay, at such a critical moment, is not good news for chemical companies or for their customers”. The blog therefore congratulates the new President, and expresses […]
Asian naphtha falls below $300/t
ICIS is reporting today that Shell sold open spec naphtha to Cargill at $267 CFR Japan, for the first half of January. Normally the naphtha: crude ratio is around 9.5: 1. But with January Brent at $66/bbl, the ratio is now just 4:1. The blog can safely say we have never seen it this low […]
Rolls Royce prices start to slide
BMW, the world’s largest luxury car manufacturer and owner of Rolls Royce motors, today abandoned its August forecast of record auto sales and a 4% operating margin for 2008. CEO, Norbert Reithofer, was in downbeat mood, saying that “the financial crisis is by no means behind us yet, particularly its impact on the real economy […]
GM’s October sales collapse
October’s US auto sales were as bad as expected. But even so, GM still managed a surprise. Once the undisputed market leader, its sales were truly awful, falling 45% versus October last year, as shown in the chart above. A sign of GM’s own shock is that its inventory ballooned to 141 days, whilst Chrysler’s […]
Oil producers at a crossroads
The blog has been thinking about last week’s leaked report from the International Energy Agency (IEA). This said that the world needs “to invest $360bn each year until 2030 to replace falling oil production and increase supply”. The IEA based this sum on a new analysis of 500 oilfields, which showed the current depletion rate […]
China’s Pearl River Delta slows
The Pearl River Delta is the original heart of China’s industrialisation process. The blog first visited 20 years ago, as China slowly opened up to the West, and was amazed to discover that cities such as Guangdong were already as large as Hong Kong. Today, along with Shanghai, the region is the manufacturing capital of […]
BASF warns on 2009
Back in August, the blog noted that BASF chairman Jurgen Hambrecht was forecasting that “the world will still continue to grow respectably”, although he foresaw a temporary slowdown into H1 2009. Yesterday, however, this mood of relative optimism had disappeared as BASF announced Q3 results. Hambrecht is now forecasting, along with Dow’s Andrew Liveris, that […]
Deflation threatens
Prof Nouriel Roubini of New York University was one of those to correctly forecast a global recession. He is now warning in a detailed new article that “sharp deflationary pressures” are likely to hit in 2009. As evidence, he notes: • the supply glut that has emerged in “housing, consumer durables, motor vehicles” • “the […]
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