I do not know what others out there in the blogosphere are seeing, but I am not seeing the chemical industry crashing and burning in the same manner that the finance sector is (apparently) failing.  Money is tight and some industries like pharma have cut loose many good people. But I get a sense that the rate of descent is slowing, at least for the near term in certain parts of chemical mfg.

Many companies use these downturns as an opportunity to cut marginal operations, so it is hard to know what fraction of manufacturing has been shuttered due to opportunistic obsolescence. My CFO friend says that one should never waste a downturn. It should always be used as an opportunity to prune underperforming branches and get back in control of the headcount and other expenses. It is a chance to push the reset button.

The Bling PGM’s- Ag, Au, and Pt- have been trending upwards for the last few months. By contrast, the utility PGM’s- Pd, Ru, Rh, Os, Re- are flat, with the exception of a modest recent uptick in Rh prices.  The pricing of utility PGM’s reflect subdued demand for industrial catalysts, alloys, semiconductor components, and electrodes. This is consistant with what you see looking out the window. Manufacturing is depressed.  In yonder glade sits lonely ruthenium at US$75/toz.

The uptick in Bling PGM’s has more to do with the psychology of people and institutions with money. If you close your eyes you can see them madly scampering about, arms full of lucre, looking for a pretty box to stuff it into. Real estate is a train wreck and the stockmarket is a bottomless mineshaft of despair. Gold is dazzling, eternal, and a physical investment. You can always barter gold for bread, diesel, and ammunition.

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