MH Daily Bulletin: March 15

March 15, 2023 • Posted in Daily Bulletin

News relevant to the plastics industry:

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  • Oil dropped over 4% to a three-month low Tuesday on worries of a fresh financial crisis caused by U.S. inflation and regional bank failures.
  • Energy futures were down further in mid-morning trading today, with WTI off 4.1% at $68.43/bbl, Brent down 3.8% at $74.88/bbl, and U.S. natural gas down 3.9% at $2.47/MMBtu.
  • U.S. crude stocks likely rose by 1.155 million barrels last week, according to the American Petroleum Institute. Government data is due today.
  • U.S. natural gas consumption averaged 88.5 billion cubic feet per day last year, a record in data going back to 1949:
U.S. Annual Natural Gas Consumption by Sector (2013-2022)

Supply Chain

  • A major storm dropped more than two feet of snow in portions of northwest Massachusetts and southern Vermont Tuesday, bringing regional power outages and travel disruptions.
  • The U.S. Surface Transportation Board approved the merger between Canadian Pacific Railway and Kansas City Southern, paving the way for the first freight railway linking Canada, Mexico and the U.S. 
  • Trucking executives say they expect a strong rebound in freight demand in the second half of the year.
  • Shortages of truck chassis and other freight transport equipment in the U.S. are dissipating.
  • Worsening traffic congestion in the U.S. Sun Belt is threatening economic growth in some regions, experts say.
  • Retail diesel fuel prices in the U.S. fell last week for the sixth consecutive week and for the 16th week in the past 20.
  • Canadian package carrier Purolator will spend about $730 million to buy a fleet of electric parcel vans and electrify its terminals.
  • A.P. Moller-Maersk is opening its first route to Ukraine since Russia’s invasion.
  • Israeli shipping line Zim expects a second-half turnaround after fourth-quarter net profit plummeted to $417 million from $1.71 billion a year earlier.
  • Sherwin-Williams faces a new lawsuit for adding a 4% supply-chain surcharge at the checkout line for its paints.
  • North Carolina-based truckload carrier FreightWorks ceased operations after a sudden loss of business, impacting 200 employees.
  • Infinera, a U.S. manufacturer of semiconductors for the telecom industry, is exploring a sale, according to reports.
  • In the latest news from the auto industry:
    • GM will extend a production halt at its Silao Assembly Plant in Mexico through March 20 due to a supply-chain issue.
    • Volkswagen still plans to bring an affordable electric vehicle to market by 2025, with a potential sticker price of around $26,790.
    • Honda’s U.S. unit will move production of its Accord sedan from Ohio to Indiana in 2025 as part of a shift to building electric vehicles.
    • A joint startup between U.S.-based Silk EV and Chinese automaker FAW scrapped plans to build a production site in Italy.
    • Stellantis is eyeing Spain as the potential home for a small-vehicle production hub.

Domestic Markets

  • U.S. retail sales fell a greater-than-expected 0.4% in February. 
  • Producer prices unexpectedly dipped 0.1% in February and were revised downward for January, signaling a softening in the economy. 
  • The Federal Reserve is expected to raise its benchmark rate by 25 basis points next week and again in May after a government report showed U.S. inflation remained high in February.
  • U.S. small-business confidence rose to a three-month high in February, although many owners continued to struggle with finding workers, according to a new survey.
United States Nfib Business Optimism Index
  • The rate on a 30-year fixed mortgage fell to 6.57%, down from 7.05% a week ago, amid turmoil in the banking sector after the collapse to two regional banks.
  • Homebuilder Lennar reported better-than-expected quarterly profit as high property prices helped offset continued supply shortages.
  • Facebookparent Meta announced plans to cut 10,000 jobs this year, its second round of mass layoffs announced in recent months.
  • Apple is delaying bonuses for some corporate divisions and expanding a costcutting effort, according to reports.
  • Boeing delivered 28 aircraft in February, down from 38 the previous month amid supply-chain problems and a delivery pause for the 787 Dreamliner.
  • U.S. airline executives said they were optimistic about travel demand for the rest of the year, shaking off worries about operating costs and fears of slowing demand.
  • Southwest Airlines plans to hire more staff this winter to address problems that led to large-scale cancellations last holiday season.
  • Tyson Foods will close two U.S. chicken plants with almost 1,700 employees in May as it works to streamline operations.
  • Dollar Tree has stopped selling eggs after the staple food skyrocketed in price by as much as 60% during the fall.
  • Amazon plans to launch and test its first satellites providing internet-from-space service to customers as soon as 2024.

International Markets

  • Renewed concerns hit the European banking sector after Credit Suisse’s major stockholder said it can’t provide the bank with further financial support if it falters.
  • Despite the turmoil in the banking sector, the European Central Bank is expected to raise rates another 50 basis points when it meets tomorrow.
  • Chinese consumers are returning to hotels, restaurants and some shops, but they are cautious about what they buy, disappointing hopes for an immediate post-pandemic splurge.
  • China will raise its retirement age gradually and in phases to cope with the country’s rapidly aging population, officials said Tuesday.
  • Spanish consumer prices rose 6% in the 12 months through February, up slightly from January.
  • Argentina’s annual inflation rate surpassed 100% in February, the first time it hit triple figures since a period of hyperinflation in 1991.
  • Two Saudi Arabian airlines announced plans to order 78 Boeing 787 Dreamliners, the fifth largest commercial order by value in Boeing’s history.
  • Plastics recycling capacity in the EU grew by 17% in 2021.

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