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 […]
Chemicals and the Economy
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 […]
Budgeting for survival
The blog prefers to be optimistic. But 30 years in the chemical industry has taught it to be extremely realistic. So its motto for 2009 Budgets is ‘batten down the hatches’. Chemical companies are likely to be sailing in some very rough seas, with treacherous currents and plenty of dangerous rocks. Survival, not growth, is […]
Returning Boards to their proper role
Today sees a supportive follow-up in the Financial Times to yesterday’s posting about LloydsTSB, and its willingness to rebuff those who parroted the ‘shareholder value’ mantra. The man who led the bank’s director development programme reveals that its former Chairman, Sir Brian Pitman, ‘drummed into us that the board’s main focus was to ensure continuing […]
Recession almost certainly now underway
Asian naphtha spreads versus crude oil have fallen to all-time lows. Dubai crude was reported at c$80/bbl last week, whilst naphtha was $30/bbl lower, at a price of only $50/bbl. This shows an extreme lack of demand for naphtha, and hence for petrochemicals. In turn, this is a leading indicator of economic downturn. ICIS news […]
The dying days of the ‘shareholder value’ cult
On Monday, governments announced c$3.5 trillion of recapitalisation and capital injection into the global banking system. One would have then expected the major investment institutions to rally round in support. But on Wednesday, they conspicuously failed to do this. Instead they argued that the taxpayer should provide yet more money, in the form of dividends […]
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