MH Daily Bulletin: August 30

August 30, 2022 • Posted in Daily Bulletin

News relevant to the plastics industry:

At M. Holland

  • M. Holland’s latest logistics outlook examines current challenges and industry trends that are impacting shipping, trucking and rail. Although the plastics industry is faring a little better than earlier this year, M. Holland’s experts predict disruption to continue well into 2023. Click here to read the full outlook for the remainder of 2022.
  • M. Holland will be attending the North American Detroit Auto Show on Sept. 14-15. This annual showcase for emerging automotive technologies will be held at Huntington Place in Detroit, Michigan. If you’re attending, please RSVP for M. Holland’s reception or contact Mike Gumbko, Strategic Account Manager, to set up a meeting with our Automotive team.
  • M. Holland will be closed Monday, Sept. 5, in observance of the Labor Day holiday.
  • Market Expertise: M. Holland offers a host of resources to clients, prospects and suppliers across nine strategic markets.

Supply

  • Oil prices spiked 4% Monday, extending last week’s gain, on concerns over lower output from OPEC.
  • In mid-morning trading today, WTI futures were down 3.8% at $93.28/bbl, Brent was down 4.0% at $100.90/bbl, and U.S. natural gas was down 4.1% at $8.96/MMBtu.
  • Crude inventory in U.S. strategic reserves fell by 3.1 million barrels last week to 450 million barrels, the lowest since December 1984.
  • Energy expenditures made by U.S. consumers fell to $1 trillion in the first year of the pandemic, the lowest level since 2002:
2020 inflation-adjusted U.S. energy expenditures lowest since 2002
EU Natural Gas
  • Norwegian carbon storage firm Northern Lights, a joint venture founded by Equinor, TotalEnergies and Shell, secured a deal to store emissions from a major Dutch fertilizer maker starting in 2025, a commercial breakthrough that marks the world’s first agreement for cross-border CO2 transport.
  • Arizona-based First Solar, the U.S.’s biggest solar-panel maker, plans to spend $1.2 billion to boost production by 75% with help from incentives under the recently passed climate and healthcare law. 

Supply Chain

  • Record-breaking temperatures will hit the U.S. West this week including in Southern California and Arizona, where more than 30 million people are already under heat advisories. 
  • With five straight months of below-average rainfall, Britain saw its driest July since 1935, prompting widespread restrictions from utilities on water use.
  • U.S. freight railroads struck contract deals with unions representing 15,000 of some 115,000 unionized workers Monday, a positive signal in negotiations that have lasted over two years. The Drewry Shipping Consultants’ index for container rates from Shanghai to Los Angeles fell 6% last week to $6,127, down 45% from January.
  • A measure of rates for the bulk sector’s largest capesize vessels fell 30% in a single day late last week.
  • The container ship backlog outside the ports of Los Angeles and Long Beach dropped to eight vessels Monday, the lowest level in two years. 
  • Outbound shipments from the congested Port of Oakland fell 30% from June to July, the biggest drop since 1997. Some industries are signing deals for new trade routes that skip the port entirely.
  • The Port of Oakland will spend $2 million to build infrastructure to handle electric vehicles in its cargo operations.
  • Tanker operator Frontline swung to a $42.2 million second-quarter profit as it prepares to merge with rival Euronav. 
  • Maersk’s port unit APM Terminals plans to sell its 30% stake in Global Ports Investments, Russia’s top container terminal operator, as part of its plan to fully exit from the country. 
  • California-based Applied Materials, a supplier of equipment used in computer chip manufacturing, says its backlog for parts and equipment continues to grow despite declining sales of smartphones and PCs. 
  • UPS plans to buy eight new Boeing 767 freighters to support continued strength in parcel shipping, expanding its total 767 fleet to 108 aircraft.
  • In the second quarter, Korean Air saw 42% more freight traffic compared to 2019 while freight revenues were up 44% year over year, a salve for declining passenger volumes. 
  • Kroger is expanding the reach of its online grocery delivery network with the recent opening of two automated fulfillment centers in Tennessee and Illinois. 
  • Over 500,000 tons of U.S. grain were shipped through the Great Lakes’ St. Lawrence Seaway in the second quarter, a 37% increase from a year ago. 
  • The Canadian government launched a formal challenge to U.S. softwood lumber duties under the USMCA trade deal on Monday.
  • Washington State Ferries, the U.S.’s largest ferry system, plans to transition to a fully hybrid-electric fleet by 2040.

Domestic Markets

United States Dollar
  • The Federal Reserve’s quantitative easing will ramp up this week as the central bank lifts the monthly selloff of its nearly $9 trillion portfolio to $95 billion per month
  • U.S. teenagers aged 15 to 19 accounted for almost 13% of new hires in May, up from around 2% in 2019 amid persistent worker shortages.
  • The Dallas Fed’s index of Texas manufacturing activity hit -12.9 in August, remaining in contraction territory despite substantially improving over July’s reading of -22.6:
United States Dallas Fed Manufacturing Index
  • The fall of stock markets through the first half of this year contributed to an over 10% decline in the inflation-adjusted net worth of the wealthy, while the middle class experienced a 4.9% decline, and working class net worth was up 2.8%.
  • The median U.S. rent for a one-bedroom apartment now stands at $1,486, up 11.8% from last August to a record high. More than half of U.S. cities saw double-digit rent hikes, with some over 30%. 
  • Economists with Goldman Sachs expect U.S. home price growth to stall completely next year as buyers shy away from rising borrowing costs. 
  • The price of lithium carbonate has risen dramatically this year on growing demand for electric vehicles:
Lithium Prices Putting EV Producers Under Pressure
  • U.S. electric vehicle maker Lucid filed for a new security offering of up to $8 billion as the automaker looks to beef up working capital while supply snarls crimp production. 
  • Tesla launched a lawsuit seeking to invalidate a Louisiana law that bars the automaker from selling its electric vehicles directly to consumers rather than using dealerships as intermediaries. 
  • Fitness equipment maker Peloton will delay publication of its annual report, citing more time needed to sort out accounting tied to its restructuring effort. 
  • Shredded COVID-19 personal protective goods such as gowns, masks and gloves can increase the strength of concrete by 20%, providing a solution for the solid waste challenge presented by the pandemic. 

International Markets

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