MH Daily Bulletin: February 24
February 24, 2023 • Posted in Daily BulletinNews relevant to the plastics industry:
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Supply
- Oil rose 2% Thursday on expectations of steep cuts to Russian production next month.
- In mid-morning trading today, WTI futures were up 0.1% at $75.49/bbl, Brent was up 0.2% at $82.37/bbl, and U.S. natural gas was up 3.9% at $2.40/MMBtu.
- The Energy Information Agency confirmed that U.S. crude stocks rose by 7.6 million barrels last week, putting inventories above their five-year average.
- After a record-setting year of profitability in 2022, shale producers are battling steep cost inflation, which has driven Devon Energy’s breakeven price to $40/bbl, up from $30/bbl a year ago.
- The CEO of Pioneer Natural Resources expects oil to rise as high as $100/bbl later this year.
- The war in Ukraine has redrawn global trade routes, with a host of trading companies stepping in to move Russian oil to global markets despite Western sanctions.
- Russia plans to cut oil exports from its western ports by up to 25% in March, more than previously announced, in a bid to lift prices.
- Europe will need increased volumes of LNG this year to maintain full storage supplies, analysts say.
- Uzbekistan is falling behind on long-term plans to raise gas output.
- Germany will ban gas and oil heating in new or renovated buildings starting next year as part of efforts to meet climate targets.
- A group of carbon-removal companies has formed a coalition to lobby the U.S. federal government on carbon capture policies.
- After reporting a fourth-quarter loss, BASF said it will cut 2,600 jobs in Europe, mostly in Germany, and suspend share buybacks.
Supply Chain
- Containers waited an average of 4.3 days to move by rail from the ports of Los Angeles and Long Beach in January, the shortest wait time in a year.
- Labor talks covering more than 22,000 workers at U.S. seaports on the West Coast are ongoing, officials said jointly this week.
- Container throughput at Germany’s Port of Hamburg fell just over 5% last year.
- Boeing halted deliveries of 787 Dreamliners due to a documentation issue, the FAA said.
- Cosco Shipping opened a new sea and air logistics center in Guangzhou, China.
- U.S. freight brokers have laid off over 1,000 staffers this year as they adjust to a softening market.
- The U.S. Commerce Department said it will create two semiconductor manufacturing clusters by 2030.
- Taiwan’s TSMC plans to build its second chipmaking plant in Japan, with total investment expected to be more than $7.4 billion.
- In the latest news from the auto industry:
- Lordstown Motors will temporarily stop production and deliveries of its electric pickup truck due to performance and quality issues.
- Shares of electric-vehicle-maker Lucid plummeted Thursday amid weak production forecasts for 2023.
- Ports in the U.S. Southeast and Gulf Coast expect a boost in cargoes as electric-vehicle manufacturing expands in the region.
- Carvana’s acquisition of used-car auction business Adesa weighed heavily on its quarterly results.
- Lithium prices in China slumped by almost one-third over the past three months due to weak demand.
- French car parts-maker Valeo forecast strong sales growth this year on rising demand for electrification and driving assistance technology.
Domestic Markets
- The personal consumption price index, closely watched by the Federal Reserve, was up a higher-than-expected 0.6% this month.
- Consumer spending surged 1.8% in January, the most in two years.
- The U.S. economy is exhibiting strength early this year after posting solid but weakening growth at the end of 2022.
- After falling 2.7% in December, costs for construction materials jumped over 1% in January and were up 4.9% year over year.
- Mortgage rates rose for a third straight week, hitting 6.5%, the highest level since November.
- Total U.S. home values fell 4.9% in the second half of 2022, the steepest drop in over a decade.
- Online travel agency Booking Holdings set a record in January for monthly bookings.
- Domino’s Pizza missed quarterly sales estimates after hiking delivery and menu prices the past year.
- Dollar General forecast full-year profit well below expectations after being forced to offer deep markdowns to clear excess inventory.
- Moderna forecast declining COVID-19 vaccine sales and higher costs for 2023, raising concerns of a potential full-year loss.
International Markets
- Today marks the one-year anniversary of the Ukrainian war, which has reshaped global markets.
- Despite stiff sanctions and an exodus of Western businesses, Western goods are still crossing the Russian border.
- Japan’s central bank intends to maintain easy monetary policy to hold down inflation, officials say.
- Mexico’s headline inflation fell to 7.76% in early February, a steeper drop than expected.
- A slowdown in grain exports from Ukraine is threatening to raise global bread prices.
- Alibaba Group Holding reported better-than-expected quarterly revenue Thursday, helped by China’s easing of COVID-19 curbs.
- High ticket prices are not dissuading travelers from the air, as international airlines report bumper profits after suffering big losses during the pandemic.
- Flights to and from Amsterdam’s Schiphol airport will be limited to 460,000 per year, a bid to cut down on noise and environmental pollution.
- Belgium set new flight limits for Liege Airport, primarily a cargo airfield, due to environmental concerns.
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