The litmus test for the global economy

Oil prices start to reconnect with coal and gas

Oil prices are finally starting to reconnect with other fossil fuel prices, as the chart shows.  It compares US WTI prices in terms of $/MMBtu value (WTI/5.8), versus US natural gas and coal prices: In January 1990, WTI was $3.94 versus natgas at $2.30 and coal at $1.45 (all $/MMBtu) In January 2000, WTI was

China’s plastic ban and recycling launch marks end of ‘business as usual’ for plastics industry

Paradigm shifts start slowly at first, and it is easy to miss them. But then one day, they suddenly become obvious, and it becomes a scramble to catch up. That’s what happened on the waste plastic issue last week, when China decided to take action. As official news agency, Xinhua, reported: “The policy measures proposed

Day of reckoning approaches for US polyethylene expansions, and the European industry

Planning for future demand in petrochemicals and polymers used to be relatively easy during the BabyBoomer SuperCycle. The team would consult the latest IMF forecast for global and regional growth, and then debate the right ratio to use to calculate product demand. For polyethylene (PE), the ratio was generally just above GDP at around 1.1x,

The End of “Business as Usual”

In my interview for Real Vision earlier this month, (where the world’s most successful investors share their thoughts on the markets and the biggest investment themes), I look at what data from the global chemical industry is telling us about the outlook for the global economy and suggest it could be set for a downturn. “We look at

US-China tariffs could lead to global Polyethylene price war

I was interviewed on Friday about the likely impact of President Trump’s trade wars on the global chemical industry by Will Beacham, deputy editor of ICIS Chemical Business. His interview is below. The introduction on Friday of trade tariffs by China and the US is the first step in a trade war that could turn into […]

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Plastics demand is peaking as circular economy arrives

The Stone Age didn’t end because we ran out of stones.  Similarly, coal is being left in the ground because we no longer need it any more.  And the same is happening to oil, as Saudi Arabia recognised last year in its Vision 2030: “Within 20 years, we will be an economy that doesn’t depend mainly […]