European interest rates go negative as Draghi boosts stock markets

Interest rates Mar15Historians will not look kindly on Mario Draghi, head of the European Central Bank.

They will ask what he thought he was doing, issuing an extra €1tn ($1.05tn) of debt from March 2015, when the Eurozone was already struggling under a dead-weight of government debt:

  • In the big countries, Italy has $47k of debt per person; France $42k, Germany $36k, Spain $30k
  • In smaller countries, Ireland has $60k, Belgium $48k, Austria $39k, Greece $38k, Netherlands $37k
  • Draghi’s QE programme adds a further $3k of debt per person to these already alarming numbers

And this is not the worst result of his policy.  His main impact, as the Bank of England‘s chjart above shows, is that interest rates for European governments are now going negative.

What is a negative interest rate, you may well ask?

The normal rule is that you earn interest when you deposit money with a bank, or lend to a government.  But no longer under Mario Draghi’s regime.  Instead, you pay the government:

  • Germany, Finland and the Netherlands now have negative interest rates out to 2022 – 7 years
  • Denmark and Austria are negative out to 2021: Belgium to 2020, France to 2019; Sweden to 2018
  • The policy has also impacted Switzerland, which borders the Eurozone; its interest rates are negative out to 2025

What does this mean in practice?

Will banks suddenly start lending to companies to develop fabulous new products and services for the New Old 55+ generation – now the fastest growing sector of the population and woefully under-served today?  Of course not.

Draghi’s free cash will instead be used by speculators to make quick profits in financial markets, as the Financial Times headlined on Saturday:

INVESTORS PILE INTO EUROZONE SHARES: ‘Draghi effect’ prompts currency and fund flows

At the same time, the value of the euro is collapsing.  It has fallen 12% versus the US$ since the New Year, and will likely soon be at parity with it.

Thus Mr Draghi is simply repeating the mistake made by the US Federal Reserve with its Quantitative Easing policy from 2009, and by the Bank of Japan with its Abenomics policy since 2013.

One day though, perhaps not too far away, some investors are going to start to worry about how all this debt can be repaid.  And it won’t take them very long, once they start to do their sums, to realise that it can’t be repaid:

  • Ageing populations means lower growth.  Older people already own most of what they need, and their incomes are declining as they enter retirement
  • China’s need to create jobs means it is now exporting deflation around the world
  • Low growth and deflation are a toxic combination for debt, as we note in the new pH report
  • They mean the debt can’t be repaid out of rising incomes, whilst its value is rising every day.

Mr Draghi may have won new friends in the day-trader community with his new policy.  But that is not his job.  As Paul Volcker has warned, his job is to preserve the value of the currency, and the savings of 334m Europeans.

Draghi’s new policy of allowing negative interest rates to become established, instead risks destroying them both.

BRIJ auto sales head in different directions

BRIJa Feb15

There has been a lot of wishful thinking over the past 15 years about the BRIC countries (Brazil, Russia, India and China).  The experts told us they were all going to become middle class overnight, and ensure that global growth continued to motor, even as the West slowed.

Reality has proved rather different, of course.  This makes it all the more important that we keep a close eye on developments in these countries, which are home to 3bn people.

Auto markets are one key area.  I looked at developments in China as well as the US and EU recently, so today I focus on the other 3 BRIC countries, plus Japan.  These 7 markets are 80% of world sales.

Sales for Brazil, Russia, India and Japan (the BRIJ countries) are shown in the chart above:

  • In total, their auto sales volume equal EU sales of 12.4m
  • It has been static at this level since 2012, when President Xi was just about to take office in China
  • Since his arrival, China’s move into the New Normal has changed trade patterns around the world
  • Brazilian and Russian auto sales have felt the immediate pain, whilst Japan has plunged into Abenomics
  • But the outlook for India could be quite promising, if Premier Modi carries through his reform programme

Japan is the largest market of the 4 (blue area).  Its sales peaked at 4.7m in the mid-2000s, and were at this level again in 2014.  But this was only due to an exceptional Q1, when 1.6m cars were sold ahead of April’s increase of VAT to 8%.  Sales in the other 9 months were just 3.1m.  Sales in 2015 will therefore probably stay slow this year, especially if Japan now heads back into deflation as I expect.

Brazil was the 2nd largest market in 2014 at 2.6m, down from its 2.9m peak in 2012.  It failed to diversify its economy during the boom years of buoyant commodity and other sales to China, and is now close to recession.  Its sales fell 7% in 2014, and 19% in January after the government reinstated a 4.5%-7% tax to help boost its weak finances. Dealer inventories are also high, suggesting sales will continue to struggle in 2015.

Russia was the 3rd largest of the four markets in 2014 at 2.5m, down from its 2.8m peak in 2012.  It is used to volatility, with its sales halving to 1.5m in 2009 versus 2008, before rebounding.  January sales fell 24%, and this slowdown looks more serious, with oil and commodity prices weakening, the value of the rouble collapsing, and sanctions in place over many parts of the economy due to Ukraine. Renault/Nissan CEO Carlos Ghosn halted their sales in December, warning of a potential “bloodbath” in 2015 due to the currency crisis.

India was the smallest of the 4 in 2014 at 2.5m, down from a peak of 2.6m in 2012, but may well hold the most long-term promise.  Unlike China, it has underspent on infrastructure over the past 10 years.  But unlike the others, it has a relatively young population, and could gain a ‘demographic dividend’ if it focused on improving basic living conditions.  But these things are easier said than done, and so we will have to wait to see if the promise of Premier Modi’s election campaign is fulfilled.

Overall, recent developments in the 7 major markets do nothing to change my view in October that we have reached “peak car” moment for global auto markets.

Oil price fall set to push Japan back into deflation

Japan CPI Nov14Could Japan actually go bankrupt at some point in the future?  This was the question left hanging in the air after Friday’s panic at the Bank of Japan, when its Governor forced through his new stimulus policy on a 5 – 4 vote.

Financial markets’ first reaction was to assume this was a coup de théâtre on his part, meant to ‘shock and awe’.  But central banks typically try to be as boring as possible, and very predictable.  Also, Japan is the land of consensus.

Clearly something is not right.  And Governor Kuroda’s press conference spelt out the issue – the return of deflation

“We are at a critical moment. There is a risk that victory over deflation may be delayed.”

Nor is it difficult to see why Japan might be about to topple back into deflation.  As the chart shows:

  • It has been in deflation for 2/3rds of the period from 1995 – 2013, 150 months out of 19 years
  • It was only out of deflation very briefly during this period – in 1996-8, 2006 and 2008
  • The latest increase, to 3.4%, took place in April this year, after sales tax was increased from 5% to 8%
  • Already the rate is turning down, and the impact of the sales tax will disappear from the index next April

Against this background, it would only take one “shock” for Japan to move back into deflation.  And, of course, just such a shock has occurred with the collapse of oil prices and other commodities over the summer:

  • Japan is the world’s 2nd largest importer of fossil fuels, after China
  • The Fukushima tragedy means it has been the world’s 3rd largest oil consumer and importer since 2012
  • Since June 16, the oil price has fallen 26% from $116/bbl to $86/bbl on Friday
  • On its own, this is highly likely to push Japan back into deflation

In addition, of course, the whole Asian region is seeing slower growth as China leads the Great Unwinding of policy stimulus.  There is little that Premier Abe or Governor Kuroda can do about either of these external developments.

ABE-KURODA’S ’3 ARROWS’ POLICY IS HIGHLY RISKY FOR THE ECONOMY
The problem for Japan is that the Abe-Kuroda policies are highly risky for its economy, as I discussed last December:

  • It has the oldest population in the world, with a median age of 46 years
  • According to the OECD, 42% of the adult population are over 65, and this percentage is rising
  • One in two adults are in the New Old 55+ generation, when spending declines quite sharply

There is therefore no chance that the new policies, known as Abenomics, could work.

The OECD also calculate that Japan’s net relative pension level equals only 38% of net average earnings, so the drop in spending power on retirement is profound.  In addition, the collapse in fertility rates since 1955 means Japan’s population is already declining, from 127m today to 108m by 2050 according to UN Population Division forecasts.

So its GDP must now be on a declining trend, especially as Japan’s consumer spending is nearly 2/3rds of GDP.

Even worse, however, is that the so-called ’3rd arrow’ of Abenomics policy – structural reform in the economy – has never been fired.  For example, female employment levels are just 63%, far lower than in other rich countries, and Abe has done nothing to change this.  Instead, he has focused on the other two arrows:

  • Massive monetary easing to push up stock market prices and create a ‘wealth effect’
  • Major government spending increases to try and boost demand
  • One key aim has been to devalue the currency to boost exports and create inflation
  • The yen has thus fallen 47% versus the US$ since Abe took office, from Y76 in January 2012 to Y112 on Friday

Friday’s announcement was more of the same.  The Y127tn ($1.14tn) Government Pension Investment Fund (GPIF) has been told to increase its stock market holdings by Y34tn, and to sell Y30tn of its government holding to the Bank of Japan.  The news led to an astonishing 3% fall in the value of yen versus the USD, from Y109 to Y112.

Kuroda’s policy announcement also showed he was aware of the bankruptcy risk.  Clearly no foreign investor would buy Japan’s government bonds – interest rates are near 0%, and they face a near-certain exchange rate loss.  This must be why the Bank of Japan will be buying the GPIF’s bonds.

But this type of manoeuver is essentially sleight of hand – Japan’s borrowing was in real yen, and will have to be repaid in real yen.  Similarly, its growing army of pensioners cannot live on electronic money.  They need real cash each week if they are to eat and to keep their homes warm in the winter.

And when deflation returns, it will increase the real value of the debt created by Abe-Kuroda, and so create a further headwind for economic growth.  Japan’s debt was already $80k for every man, woman and child back in March.  Abe-Kuroda’s policies are increasing this level on a daily basis.

Japan has not yet got to the point where bankruptcy has become a real risk.  But time is running out for it to accept demographic reality.  It needs to return to the sensible policies of Kuroda’s predecessor as Governor, Masaaki Shirakawa.  He understood very well the threat posed by current policies when warning in 2012:

“The implications of population aging and decline are also very profound, as they contribute to a decline in growth potential, a deterioration in the fiscal balance, and a fall in housing prices.”

 

WEEKLY MARKET ROUND-UP
The weekly round-up of Benchmark prices since the Great Unwinding began is below, with ICIS pricing comments:

PTA China, down 24%. ”End-users who are in the re-export business were seeking cargoes”
Naphtha Europe, down 21%. “Naphtha supplies lengthened further this week, with petrochemical buyers continuing to opt for LPG”
Brent crude oil, down 18%
Benzene Europe, down 13%. “Sluggish derivative demand meant that some length was growing.”
¥:$, down 10%
HDPE US export, flat. “Traders said prices need to drop at least 10 cents/lb more to compete with China and Asian values”
S&P 500 stock market index, up 3%

Oil price fall set to push Japan back into deflation

Japan CPI Nov14Could Japan actually go bankrupt at some point in the future?  This was the question left hanging in the air after Friday’s panic at the Bank of Japan, when its Governor forced through his new stimulus policy on a 5 – 4 vote.

Financial markets’ first reaction was to assume this was a coup de théâtre on his part, meant to ‘shock and awe’.  But central banks typically try to be as boring as possible, and very predictable.  Also, Japan is the land of consensus.

Clearly something is not right.  And Governor Kuroda’s press conference spelt out the issue – the return of deflation

“We are at a critical moment. There is a risk that victory over deflation may be delayed.”

Nor is it difficult to see why Japan might be about to topple back into deflation.  As the chart shows:

  • It has been in deflation for 2/3rds of the period from 1995 – 2013, 150 months out of 19 years
  • It was only out of deflation very briefly during this period – in 1996-8, 2006 and 2008
  • The latest increase, to 3.4%, took place in April this year, after sales tax was increased from 5% to 8%
  • Already the rate is turning down, and the impact of the sales tax will disappear from the index next April

Against this background, it would only take one “shock” for Japan to move back into deflation.  And, of course, just such a shock has occurred with the collapse of oil prices and other commodities over the summer:

  • Japan is the world’s 2nd largest importer of fossil fuels, after China
  • The Fukushima tragedy means it has been the world’s 3rd largest oil consumer and importer since 2012
  • Since June 16, the oil price has fallen 26% from $116/bbl to $86/bbl on Friday
  • On its own, this is highly likely to push Japan back into deflation

In addition, of course, the whole Asian region is seeing slower growth as China leads the Great Unwinding of policy stimulus.  There is little that Premier Abe or Governor Kuroda can do about either of these external developments.

ABE-KURODA’S ’3 ARROWS’ POLICY IS HIGHLY RISKY FOR THE ECONOMY
The problem for Japan is that the Abe-Kuroda policies are highly risky for its economy, as I discussed last December:

  • It has the oldest population in the world, with a median age of 46 years
  • According to the OECD, 42% of the adult population are over 65, and this percentage is rising
  • One in two adults are in the New Old 55+ generation, when spending declines quite sharply

There is therefore no chance that the new policies, known as Abenomics, could work.

The OECD also calculate that Japan’s net relative pension level equals only 38% of net average earnings, so the drop in spending power on retirement is profound.  In addition, the collapse in fertility rates since 1955 means Japan’s population is already declining, from 127m today to 108m by 2050 according to UN Population Division forecasts.

So its GDP must now be on a declining trend, especially as Japan’s consumer spending is nearly 2/3rds of GDP.

Even worse, however, is that the so-called ’3rd arrow’ of Abenomics policy – structural reform in the economy – has never been fired.  For example, female employment levels are just 63%, far lower than in other rich countries, and Abe has done nothing to change this.  Instead, he has focused on the other two arrows:

  • Massive monetary easing to push up stock market prices and create a ‘wealth effect’
  • Major government spending increases to try and boost demand
  • One key aim has been to devalue the currency to boost exports and create inflation
  • The yen has thus fallen 47% versus the US$ since Abe took office, from Y76 in January 2012 to Y112 on Friday

Friday’s announcement was more of the same.  The Y127tn ($1.14tn) Government Pension Investment Fund (GPIF) has been told to increase its stock market holdings by Y34tn, and to sell Y30tn of its government holding to the Bank of Japan.  The news led to an astonishing 3% fall in the value of yen versus the USD, from Y109 to Y112.

Kuroda’s policy announcement also showed he was aware of the bankruptcy risk.  Clearly no foreign investor would buy Japan’s government bonds – interest rates are near 0%, and they face a near-certain exchange rate loss.  This must be why the Bank of Japan will be buying the GPIF’s bonds.

But this type of manoeuver is essentially sleight of hand – Japan’s borrowing was in real yen, and will have to be repaid in real yen.  Similarly, its growing army of pensioners cannot live on electronic money.  They need real cash each week if they are to eat and to keep their homes warm in the winter.

And when deflation returns, it will increase the real value of the debt created by Abe-Kuroda, and so create a further headwind for economic growth.  Japan’s debt was already $80k for every man, woman and child back in March.  Abe-Kuroda’s policies are increasing this level on a daily basis.

Japan has not yet got to the point where bankruptcy has become a real risk.  But time is running out for it to accept demographic reality.  It needs to return to the sensible policies of Kuroda’s predecessor as Governor, Masaaki Shirakawa.  He understood very well the threat posed by current policies when warning in 2012:

“The implications of population aging and decline are also very profound, as they contribute to a decline in growth potential, a deterioration in the fiscal balance, and a fall in housing prices.”

 

WEEKLY MARKET ROUND-UP
The weekly round-up of Benchmark prices since the Great Unwinding began is below, with ICIS pricing comments:

PTA China, down 24%. ”End-users who are in the re-export business were seeking cargoes”
Naphtha Europe, down 21%. “Naphtha supplies lengthened further this week, with petrochemical buyers continuing to opt for LPG”
Brent crude oil, down 18%
Benzene Europe, down 13%. “Sluggish derivative demand meant that some length was growing.”
¥:$, down 10%
HDPE US export, flat. “Traders said prices need to drop at least 10 cents/lb more to compete with China and Asian values”
S&P 500 stock market index, up 3%

Central banks have created a debt-fuelled ‘ring of fire’

RingOfFire Jun14A new article by an IMF economist makes the point that in April 2008, not a single one of the mainstream economic forecasts covered by ‘Consensus Economics’ was forecasting a recession in 2009.

The IMF itself expected growth to continue, as did the World Bank and the Organisation for Economic Co-Operation and Development.  Even by September 2008, the consensus view was still for continued growth, and no recession.

As the Financial Times comments, “it is an astonishing record of complete failure“.

The blog did forecast the Crisis. But, of course, most people preferred to believe the consensus.  Their caution was understandable.  But sometimes it is necessary to go against the consensus.  And today it is essential.

The reason is simple.  Central bank policies since 2008 have clearly not solved the problems of slowing growth and too much debt.  Rather, they have made them worse, much worse.

Central banks have now created a debt-fuelled ‘ring of fire’ with multiple fault-lines, as the chart above shows.

Some of these fault-lines are becoming widely acknowledged.  Thus the Governor of the Bank of England has warned that the record level of London house prices poses:

“The biggest risk to financial stability, and therefore to the durability of the expansion, those risks center in the housing market and that’s why we are focused on that.”

Similarly, the new Chinese leadership has recognised their economy has moved into a New Normal, and that more stimulus would cause many more problems than it would solve.

The problem is that these realisations all come too late.  Policymakers have spend $33tn, and wasted 5 years, heading in the wrong direction.  We could by now have begun to emerge from the Crisis with a soundly-based platform for future growth.  But instead, we are faced with dealing with the same problems as in 2008, but on a much larger scale.

Even worse is the fact that most policymakers still do not accept that demographics drive demand.  They do not want to admit that the ‘Demographic Dividend’ of the Boomer-led SuperCycle growth has been replaced by a ‘Demographic Deficit’ caused by ageing global populations and falling fertility rates.  Instead, most prefer to indulge in wishful thinking –  arguing that adding yet more debt will somehow enable growth to return.

Thus we face a ‘ring of fire’ where the tectonic plates are shifting all the time.

This is not to say we face one big earthquake.  Rather, we face a period where one medium-sized earthquake will opens up cracks elsewhere.  And these cracks create the potential to create another debt-related earthquake elsewhere along the fault-line.

China is the epicentre of the first earthquake, as the blog noted in February when launching its Research Note.  The first economic tremors from its new policies have already moved along the fault-line, destabilising emerging economies in a wide arc from Argentina through India and Indonesia to Turkey.

The worrying feature is that these were just an early warning of the likely impact of China’s policy shifts.  We are in a world where there are multiple fault-lines with the potential to crack open when stressed by tremors from another earthquake, for example:

  • US financial markets are racing higher, fuelled by levels of debt never before seen in history
  • The Eurozone debt crisis remains unsolved, and the recent EU elections will make it even harder to find a solution
  • Russia’s establishment of a Eurasian Economic Union highlights its intention to pressure Western Europe, which depends on its energy exports 
  • And, of course, there is the great debt mountain in Japan, built even higher under Abenomics

There is little that any individual or company can now do to stop these earthquakes happening.  Even a complete about-turn by policymakers today would only reduce their impact, not remove the risk.  But we can at least try to understand why they are likely to happen, and prepare ourselves to survive them.

This will be the aim of a new series of posts, whch the blog will intends to publish over the next few weeks.  Tomorrow’s post will begin the series, updating on China’s housing and shadow banking bubble.  It hopes readers will find the series helpful.

Q4 results show companies still waiting for something to turn up

flat arrowWe all live in hope.  That seems to be the underlying message from the blog’s quarterly survey of company results.

Nothing has changed since last quarter or indeed Q2, when BASF noted that “achieving our earnings target is significantly more challenging today than we had expected”.

Yet this latest quarter was, of course, supposed to be the one when everything would suddenly come right.  But once again we are disappointed.

There were some bright spots, particularly amongst those US companies profiting from the shale gas feedstock cost advantage.  And gas companies remain insulated from the wider economy by their long-term contracts.

But beyond these beacons of light, the mood has become quite cautious.  Those close to the end-consumer, such as Akzo Nobel report that the environment remains fragile.   In Japan, Asahi Kasei are remarkably downbeat about the outlook.  Abenomics, which was supposed to reverse Japan’s demographic decline, is clearly not yet delivering on its promises.  In China, Bayer report that the new government’s polices are already hitting earnings.  And whilst BASF remain hopeful, expecting the world economy to improve slightly in 2014, even their optimism is tempered by concern over rising volatility.

The great author Charles Dickens was the first to describe this state of mind in his classic novel ‘David Copperfield’.  It features Mr Micawber, modelled on Dickens’ own father, whose motto in life was that “something will turn up”.

However, nothing ever did turn up.  Instead, Micawber finally recognised reality and decided to leave Victorian England for Australia, where he then successfully started a new life.

This is what we all have to learn to do.  The global economy is not going to “turn up” and return to the SuperCycle.   Demographics drive the economy, and today’s ageing populations are thus taking us in a new direction.  This is the message of the latest episode of disappointment charted by Q4 results.

Air Products. “Continued to execute on our strong backlog, bringing on major new plants in China”
Air Liquide. “Positive trend observed since the beginning of the year, driven by our Healthcare activity”
Akzo Nobel. “The economic environment remains fragile and foreign currencies volatile”
Arkema. “Remains bullish on economic prospects for its key markets in North America and Asia”
Asahi Kasei. “Contracting demand in Japan and increasingly severe competition from low-priced imports”
Axiall. “Innovative new products and operated our plants at higher-than-industry rates”
BASF. “World economy is expected to grow slightly faster in 2014 than in 2013, despite continuing volatility”
BP. “Expects the fuel and petrochemical environments to remain challenging”
Bayer. “Reduced emphasis on economic expansion since the formation of China’s new government had led to a slowdown for chemicals earnings”
Borealis. “Continuing difficult market environment in Europe”
Celanese. “Earnings rise on lower expenses, asset disposition”
Chemtura. “Made significant progress in shaping our portfolio”
Chevron Phillips. “Focusing investments on higher growth and higher margin products”
Croda. “Global trends are unpredictable and our forward visibility remains limited”
Dow. “Global growth remains tentative, continuing to drive business uncertainty”
Dow Corning. “Year characterised by significant oversupply and pricing pressure in our industry”
DSM. “Focus will continue on the operational performance of our businesses”
DuPont. “Improvement was driven by higher volumes, new innovative products and productivity gains”
Eastman. “Challenges from increasing raw material and energy costs, particularly for propane, and continued economic uncertainty”
EQUATE. “Strong global demand for petrochemical products”
ExxonMobil. “The global chemical industry remains in a typical cyclical pattern, with the US at the top and Europe and Asia-Pacific at the bottom of the cycle”
Ferro. “Lower phthalate sales from its polymer additives segment”
Honeywell. “Unfavourable pricing in fluorine products and lower shipments in the aromatics”
Huntsman. “Aggressive self-help measures have re-focused our efforts on key markets and lowered our costs”
INEOS. “From 2010-2013, our profits in Europe have more than halved while profits in America have tripled”
Kemira. “Divestments, realignments and cost-reductions are focused on repositioning the company”
Kronos. “Lower titanium dioxide prices and the cost of settling a labour dispute”
LG Chem. “PVC margins were squeezed by the influx of offshore supplies and slow demand from emerging markets”
LyondellBasell. “We believe olefins in North America will continue to benefit from strong margins created by cost-advantaged NGLs”
Methanex. “Healthy methanol demand and stronger pricing”
MOL. “Integrated margin became weaker, driving results downwards”
Nova. “Profits primarily driven by higher polyethylene margins”
OMV. “Naphtha spreads increased somewhat”
Olin. “Chlor-alkali returns likely to be down from Q1 2014 due to lower ECU (electro-chemical unit) netbacks”
OxyChem. “New chlor-alkali capacity resulted in a significant increase in competitive activity in Q4 causing price pressure”
PKN Orlen. “Weighed down by unplanned plant shutdowns”
PPG. “Stabilising regional demand in Europe, where coatings volumes were flat in Q$ following 9 consecutive quarters of decline”
PetroLogistics. “Propylene prices may keep falling due to demand destruction”
Petro Rabigh. “Decreased petrochemical sales quantity due to utilities supplier blackout event in September had a negative impact”
Praxair. “Higher energy, metals, chemicals and manufacturing markets”
SABIC. “For 2013, net profit was up by 1.82% due to lower cost of sales and financial charges”
Shell. “Improved industry conditions in the US and Asia”
Sherwin-Williams. “Higher architectural paint sales volumes”
Sipchem. “Higher product prices, especially methanol”
Solvay. “Product prices fell in line with lower raw material costs”
Styrolution. “Good polystyrene margins and strong performance in the styrene monomer segment”
Unipetrol. “Profitability weakened due to a lower olefin margin”
Vopak. “For the first time in ten years, Vopak did not grow its earnings”
WR Grace. “Volatile moves in emerging nations’ currencies could have a major effect”
Westlake. “Higher PE and PVC resin sales prices as well as lower ethane costs”
Williams. “Continued decline in NGL margins and the significant and tragic Geismar inciden”
Yansab. “Forced shutdown of its production complex”