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 […]
Chemicals and the Economy
Leaders need to “see around corners” in today’s VUCA world
The number “42” was the answer to “the ultimate question of life” in the classic novel ‘The Hitchhiker’s Guide to the Universe’. Yet as the supercomputer providing this answer then explained, it was a pointless exercise as nobody understood the meaning of the original question. The world’s policymakers are in the same position, although they don’t yet realise this. They […]
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 […]
“Bad news barrage sinks New Year consensus”
Markets stopped operating in their true role of providing price discovery sometime ago. Instead, they became dominated by the central banks, determined to prove their theory that increased asset values can stimulate sustained economic recovery. They, of course, have the firepower to bend markets to their will. Nobody else could have spent $16tn in this manner […]
Deflation far more likely than inflation
The last in the blog’s series on things that we think we know, but may not, looks at the prospects for inflation. A new survey this week of the world’s wealthiest individuals summed up the consensus view: “If there are two factors that make the rich stand out, on this survey, it is their fear […]
China focuses on the need for jobs, as Western companies reshore production
Its all about jobs. That’s the clear message from this month’s critical Economic Plenum in China, confirming the blog’s analysis back in February 2012. Of course, there was a lot of detail about future reform plans, which will certainly help to move the country’s economy in the right direction. But in the short-term, the key […]
Record $142m for Bacon work shows markets now in “melt-up stage”
The blog is actually a fan of the artist Francis Bacon, and it rather likes the above painting of his friend and fellow-artist Lucien Freud. But the reason for showing it is not to discuss the finer points of art criticism. It is instead simply to note that its sale by auction house Christies in New York last […]
Auto sales face weaker H2
This week’s special blog series has focused on auto markets, a critical source of chemical demand. Today, it concludes by summarising developments in China, USA, EU, which account for ~55% of global sales. They have moved in different directions since the Great Recession began: • China’s volumes soared in 2009-10 • The USA has fallen […]
Facts of the week
The Financial Times reports two interesting facts: • Japan’s leading seismologist warned Tokyo Electric Power in June 2009 that “tsunamis of a completely different scale have come before” in the region of the Fukushima Daiichi nuclear plant. One, in 869, had “destroyed a castle“. But no changes were made to the plant’s defences. • The […]
China’s December surge makes it largest auto market
December was a good month for global auto sales. China’s volume jumped to 1.3 million, as buyers rushed to capture stimulus discounts before they ended. In Beijing, many ‘brought forward’ planned 2011 purchases, in order to beat the new quota system, which aims to reduce congestion by capping 2011 sales at just 240k versus 891k […]
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