The new year has started, and the people are planning strategies for production, marketing and sales. The macroeconomic parameters and major events on the global platform have made the situation even worse for the multinational conglomerate leaders that it was some time back. Let us discuss some of the developments on the global front which can impact the market in coming year.
Dynamic Crude Price – Last year the crude oil price showed how volatile it can be and how it can impact the market. Brent crude, which started last year at mark more than $65, touched $60 early in year and steadily increased thereafter to reach near $85 in October, to again fall below the lower threshold by December. With OPEC countries still discussing output cuts and uncertain American stand, the crude can be expected to remain volatile in coming months which is expected to impact the petrochemicals market with uncertain margin spread and need to have consistent eye on feedstock market, including Natural Gas.
US-China Trade Tariff: The trade negotiations have started recently among the US and Chinese delegations. While the US had sent few high-level officials for negotiations, the Chinese representatives have sent a significant larger delegation group, probably indirectly indicating its intent to negotiate the terms. With agreed 90-day period is inching closer to its deadline, international experts are not expecting any significant development in the negotiation among two countries leaving uncertain future for the trade among two largest global economies. On the ground level, the traders are on wait and watch mode. They are keeping close eye on the developments, while considering the options for all possible outcomes.
BREXIT & Europe Politics – The deadline for BREXIT is coming closer and without any clear view of deal in among the UK and European Union, the chances of hard exit are increasing day by day. The supply chain of industry participants is going to change and for good. Unpredicted situation in Italy and France are adding on to the uncertainties in European region. The region where the financial are already tight in petrochemical and chemical domain, the increasing uncertainties are casting gloomy shadow on the industrial growth expectations.
Connectivity, IP Theft & Global Manufacturing – The increasingly connected global market is far more unstable that it was a decade ago. The revelation of hardware hack in Supermicro drives, BASF technology theft allegations in Taiwan, and leaks on German politicians are some of the few examples which indicate the delicate balance among the forces and the possibilities in which it can be altered. In rise of connectivity and IP insecurity, the potential chances are there to change the direction of manufacturing investments and impacting the traditional trade routes.
Overall to conclude the details, we can surely say that, new year of 2019 can be assumed as dream scenario for global consultants which are out there to provide solution in wake of any disruption or significant movement in interconnected international trade-connectivity. The market is volatile, & full of uncertainties, yet we can surely say the hope persists and the world will adjust with changes to emerge with new balances and outlook with more robust checks & balances.
– Ankur Kalra,
Manager – Chemicals & Materials,