MH Daily Bulletin: January 13

News relevant to the plastics industry:

At M. Holland

• M. Holland is the headline sponsor for AMI’s Thermoplastic Concentrates in Orlando on Jan. 24-26. Stop by Booth #16 to speak with our experts and attend a talk on regulatory compliance changes by Christopher Thelen, M. Holland’s Senior Regulatory Specialist, on Jan. 24 at 4:20 pm.
• M. Holland will be exhibiting at MD&M West in Anaheim on Feb. 7-9. Stop by Booth #4115 to meet our Healthcare team and discuss how M. Holland’s line of medical-grade resins can help you develop safe and effective medical products and packaging.

Supply

• Oil gained 1.5% Thursday on news of further declines in U.S. inflation and optimism about economic recovery in China. Crude prices are on pace for a 6% gain this week.
• In mid-morning trading today, WTI futures were up 0.7% at $78.97/bbl, Brent was up 0.5% at $84.47/bbl, and U.S. natural gas was down 3.5% at $3.57/MMBtu.
• The White House indicated it is open to releasing more crude from strategic reserves should the need arise.
• The cost of energy in the U.S. rose at a much slower 7.3% year-over-year pace in December, down from a 13.1% rise the previous month, according to the latest inflation data:

• China’s oil consumption is expected to hit a record this year after the world’s biggest importer abandoned its COVID-19 restrictions. The country’s crude imports fell nearly 1% in 2022, the second annual drop in a row.
• Morgan Stanley expects the global oil market to tighten in the third and fourth quarters this year, supported by a recovery in demand from China.
• Reports suggest ConocoPhillips is open to selling Venezuela’s oil in the U.S. as a way to recover some $10 billion it is owed by the South American country.
• OPEC+ saw combined crude production rise to 42.71 million bpd in December, but still roughly 1.8 million bpd below targets, according to S&P Global.
• Saudi Aramco plans to boost gas production by more than 50% by 2030.
• British energy services provider Centrica expects to see a nearly eightfold increase in full-year profit.
• A French trade union called for strikes in the refinery sector to protest the government’s plan to raise the nation’s retirement age by two years.
• Bulgarian lawmakers backed a resolution to avoid the early phase-out of coal-fired power plants.
• China effectively ended its two-year ban on Australian coal Thursday.
• More oil news related to the war in Europe:
  
  • Crude oil loadings from Russia’s Baltic ports will likely rebound strongly this month from December as freight issues ease.
  • Russia more than doubled its rail exports of liquefied petroleum gas (LPG) to China last year as part of its drive to diversify its energy exports.
  • British officials are confident the country will have enough energy supply to get through next winter.
  • Inpex, Japan’s biggest oil and natural gas developer, is banking on near-term tightness in energy markets as it quickens its expansion of LNG output.
• Climeworks AG, a Swiss startup, says it conducted large-scale removal of CO2 from the open air, providing a potential kickstart to the nascent industry.
• Britain generated a record 21 GW of electricity from wind power this week, providing significant relief to gas supplies.
• China’s Ming Yang Smart Energy unveiled the world’s largest wind turbine with a rotating diameter the size of nine soccer fields.
• The Netherlands says its long-term switch from fossil fuels to renewable energy could cause electricity shortages by the end of the decade.
• A Swedish firm uncovered Europe’s largest deposit of rare earth elements, a boon to the continent’s transition to green energy.
• India will start taking bids in May for government subsidies aimed at building out the country’s hydrogen production.

Supply Chain

• Severe storm systems are expected to continue battering California through the weekend.
• U.S. air regulators said operations were back to normal Thursday, a day after an FAA computer glitch prompted a national grounding of flights. The grounding coupled with Winter Storm Elliott have created some of the most chaotic conditions in over a decade for U.S. airlines this winter.
• Britain’s Royal Mail suffered an unidentified cyber incident that left it unable to send parcels and letters overseas.
• U.S. freight costs fell 4.3% year over year in December, the first decline in 28 months, according to Cass Information Systems.
• Global air cargo volumes were down 8% in December compared with a year ago, the 10th straight month of declines.
• Global airfreight prices fell an average of 33.6% in the final week of 2022 from a year earlier, according to the Baltic Air Freight Index.
• New container ships representing 10% of existing capacity are due to be delivered this year.

• The U.S. House of Representatives reintroduced a bill that would let truck drivers as young as age 18 move containers to and from marine terminals.
• Brazil’s administration is dropping plans to privatize the country’s ports.
• China’s semiconductor sales plunged 21% in November, new data shows.
• TSMC warned first-quarter revenue could fall 5%, and the Taiwanese chipmaker plans to cut capital expenditures this year due to a slowdown in demand.
• China’s BOE Technology, a supplier to Apple and Samsung, plans to build two display-screen factories in Vietnam.
• The U.S., Canada and Mexico outlined a broad plan to reduce North American imports from Asia by 25%, part of a drive to bolster regional supply chains.
• India and the U.S. agreed to cooperate to build sustainable supply chains and boost bilateral trade, top officials said Thursday.
• Rising civil unrest in Peru is disrupting copper mining in the world’s second largest producer of the metal.
• Walmart announced a new partnership to provide Salesforce’s retailing clients with delivery services using Walmart’s vast transportation network.
• Paint and coatings-maker RPM International will cut production at some of its plants as it contends with softening demand.
• British metals company Liberty Steel will suspend work at two domestic plants and cut output at others due to high energy costs.
• U.S. contract logistics provider GXO Logistics expects to nearly double its revenue and triple its adjusted earnings by 2027.
• In the latest news from the auto industry:
  
  • Volkswagen Group’s global sales fell 7% to 8.3 million units last year, the lowest in over a decade.
  • Tesla is cutting prices in the U.S. by nearly 20% on some models to boost tepid demand.
  • Tesla is reportedly delaying plans to expand its Shanghai factory after seeing its China-made car sales hit a five-month low in December.
  • Luxury electric-vehicle-maker Lucid Group surpassed its 2022 production target, but logistics issues held deliveries to about 60% of finished cars.
  • Bloomberg expects global plug-in vehicle sales to grow from 10 million in 2022 to a record 13.6 million this year with China continuing as the largest market.
  • Car battery prices rose for the first time in at least 12 years in 2022 due to higher commodity prices and inflation.
  • Ford is expected to replace South Korea’s SK On with LG Energy Solution as its partner for a new electric-vehicle battery plant in Turkey.
  • German auto supplier Bosch will invest $1 billion in a new research and assembly center in China.
  • MG Motor India, a subsidiary of Chinese automaker SAIC, expects electric vehicles to account for 30% of overall sales this year.
  • India’s Tata Group is considering setting up plants in India and Europe to produce battery cells for electric vehicles.
  • Car sales in Russia collapsed by almost 60% last year as the industry reeled under the impact of Western sanctions.

Domestic Markets

• The U.S. reported 63,240 new COVID-19 infections and 678 virus fatalities Thursday.
• COVID-19 cases are up 90% the past two weeks in Florida.
• Over 7,000 nurses at two New York City hospitals returned to work Thursday after reaching a deal to end a strike.
• The U.S. cancer mortality rate has dropped by one-third over the past three decades due to changes in preventive measures and screening.
• U.S. consumer prices unexpectedly fell 0.1% in December, the first month-over-month decline in 2.5 years, amid declining prices for gasoline, cars and other goods. Annual inflation, meanwhile, dropped to 6.5%, the sixth straight monthly slowdown.

• The U.S.’s latest inflation data is likely to keep the Federal Reserve on track to reduce the size of interest-rate increases to 25 basis points at its next meeting on Feb. 1.
• The U.S. government’s December budget deficit quadrupled from a year ago to $85 billion. Receipts shrank modestly but outlays grew to a new December record.

• Home prices in Manhattan fell 17% in December from a year earlier, the latest sign of slowing activity in some of the hottest U.S. housing markets.
• American Airlines expects to see higher fourth-quarter profit after travel stayed strong during the key holiday season.
• Spirit Airlines pilots approved a two-year agreement that will boost their pay by an average of 34%. New pilot contracts are expected to drive up costs at other U.S. airlines this year.
• U.S. low-cost carrier JetBlue Airways plans to launch hundreds of new routes this year under a partnership with American Airlines.

International Markets

• In the latest China news:
  • Authorities are warning people against visiting elderly relatives during the Lunar New Year holiday as signs point to rising COVID-19 cases in regional and low-income areas.
  • At least half of a Beijing hospital’s 2,000 employees were infected with COVID-19 during the city’s latest wave, officials said.
  • China has not updated its daily COVID-19 reports for three days, adding to international concern over the country’s lack of transparency.
  • China’s inflation rate rose from 1.6% in November to 1.8% in December and is expected to accelerate further in the months ahead.
  • Merck plans to launch its COVID-19 antiviral treatment in China today.
• Japan is logging record numbers of daily COVID-19 fatalities, officials say.
• Germany’s net borrowing rose to $124.5 billion last year due to pandemic spending and fallout from the war in Ukraine, the third-highest level on record behind 2020 and 2021.
• South Korea’s import prices rose 9.1% in December, the slowest pace in 21 months due to a drop in oil prices. Separately, the nation’s central bank raised its benchmark interest rate by 25 basis points to 3.5% Thursday, as expected.
• Argentina’s annual inflation hit 94.8% last year, the highest rate in over three decades.
• More airlines are bringing back jumbo four-engine jets as they race to meet rebounding demand for first- and business-class travel.
• Ryanair expects to see a “very strong” summer season, likely prompting an increase in short-haul air fares.
• The world’s oceans absorbed record amounts of heat from the atmosphere last year, fueling powerful storms and weather systems that hit communities across the globe, climate scientists say.

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