Chemical reaction
Paul Hodges has long viewed chemicals as the best leading indicator for the global economy. Right now, it’s flashing red warning signals. INEOS, a widely-respected company in the industry, confirmed the widespread nature of the chemicals downturn, with lower margins, higher inventory holding costs and lower volumes across their businesses. They’re not alone, with BASF seeing a significant profit fall of more than 75%. It is a situation clearly reminiscent of 2008, when warnings about the risk from the US subprime market were ignored until it was too late. Hopes of avoiding recession are misplaced.
Edition: 169
- 15 September, 2023