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 […]
Chemicals and the Economy
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 […]
US house prices fall again
US house prices continued their downward path in August, and “every region reported negative annual returns”, according to today’s new Case-Shiller index. Nationally, average prices were down 17%, with Phoenix and Las Vegas down over 30% since last August. The recent Panic in financial markets makes a quick recovery even more unlikely. US chemical companies […]
OPEC cuts production, worries about demand
Two main factors weigh on oil markets. The first, as PetroMatrix note in their latest weekly report, is that speculative players in virtually all commodity markets are being forced to deleverage their positions, and so “the bottom will be dependent on the end of the firesale”. The other factor is the continuing fall in demand. […]
Sentiment, fundamentals….and panic
Sometimes markets move because of sentiment, sometimes because of fundamentals. Sometimes (luckily rarely), because of blind panic. The latter is what we are seeing at the moment. Investors suddenly feel they MUST sell – whether because they need the cash, have completely lost confidence, or because their family and friends are advising it. Whatever the […]
A downturn, not a dip
The blog first raised this issue last December, when noting that global chemical industry production growth had already “slowed significantly”. At that time, it questioned whether “central bankers will be able to wave the magic wand that restores us to a growth path”. And it warned “it is hard to imagine that the chemical industry […]
China focuses on the rural economy
China was the first major country to recognise the need for economic restructuring, back in August. Today, the State Council announced further details of its plans, as Q3 GDP growth slowed to 9%. Agriculture and rural development are now the key priorities. This builds on the recent Communist Party decision, described as being of “historic […]
Californian house sales jump, as prices fall
We now have an possible indication of how far house prices may have to fall in some parts of the USA, in order to attract buyers. Last month, Southern California saw a 65% rise in property sales versus September 2007. The reason, a major increase in foreclosed properties for sale. The impact on prices was […]
SABIC warns on demand
As the blog noted earlier this month, everyone looks to the majors for guidance during difficult times. It therefore welcomes today’s comments from SABICs CEO, Mohamed Al-Mady, when announcing their Q3 results. SABIC are probably the strongest petchem producer in the world, with experienced management and access to advantaged cost feedstocks. Al-Mady confirmed that SABIC […]
Oil futures focus on $50/bbl for December
Futures markets are taking an increasingly gloomy view of oil demand. And over the past 2 weeks, the volume of NYMEX contracts to sell crude at $50/bbl has soared 50-fold. But so far, as the blog expected, physical prices have stabilised at the $70/bbl level in advance of OPEC’s emergency meeting on Friday. Current OPEC […]
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