MH Daily Bulletin: May 3

News relevant to the plastics industry:

At M. Holland

• M. Holland is excited to be the Headline Sponsor for the upcoming Injection Molding & Design Expo in Detroit! This two-day trade show will highlight the latest technologies, materials, equipment and opportunities in injection molding. The event is May 25-26 and admission is free. Click here to learn more.
• How can healthcare organizations improve the environmental impact of their healthcare packaging, increase the recyclability of products and reduce overall waste? Read the insight from our experts here.
• M. Holland’s 3D Printing group offers a rapid response alternative for producing selected parts where resin availability is tight. For more information, email our 3D Printing team.
• Market Expertise: M. Holland offers a host of resources to clients, prospects and suppliers across nine strategic markets.

Supply

• Oil prices rose half a percent Monday on signs of higher demand for refined products. Diesel futures continued to rally, gaining 5% on low global supplies. 
• In mid-morning trading today, WTI futures were down 0.5% at $104.70/bbl, Brent was down 0.4% at $107.20/bbl, and U.S. natural gas was up 8.4% at $8.11/MMBtu. 
• U.S. shale producers Devon, Diamondback and Coterra reported three- and fourfold increases in first-quarter profit Monday but said they would hold output mostly steady to focus on shareholder returns.
• Swelling orders for new LNG-carrying vessels are on pace to crush last year’s $16 billion orderbook as global demand for the fuel grows and more U.S. export projects come online:

• Chinese oil demand is down over 1 million bpd from the same time last year, analysts say. 
• OPEC likely remained more than 250,000 bpd short of its planned output hike for April, the fourth shortfall in five months. The group meets Thursday and is expected to keep a gradual output increase for June. 
• Pemex reported over $6 billion in first-quarter profit, the highest in 18 years as output stabilized with more onshore and shallow-water drilling. 
• India’s power demand is up 13% from March as century-high temperatures rock the nation’s electricity grid. 
• More oil news related to the war in Europe:
  • The EU may spare Hungary and Slovakia from a Russian oil embargo as it prepares to finalize its next batch of sanctions today. 
  • German officials announced support for a potential immediate ban on Russian oil, gaining promised aid from Poland. 
  • Reports suggest Europe will look to African LNG shipments to help reduce dependence on Russian natural gas by up to two-thirds this year. 
  • Finland dropped its contract for a proposed nuclear power plant to be built by a Russian energy company. 
  • Mitsui & Co., one of Japan’s biggest traders, will stay involved with a massive LNG project in Russia’s Far East it says is vital for Japanese energy supply. The firm tripled its full-year profit to $7 billion on the recent rise in energy prices. 
  • BP took a $25.5 billion accounting charge related to its decision to exit Russian holdings, the biggest hit so far among firms pulling out of the nation. 
• Supported by a tax on energy firms, Italy unveiled over $14 billion in new fiscal support to help households and businesses manage rising costs, particularly for energy. 
• The British government is calling on North Sea producers to reinvest massive earnings into building more energy projects. 
• Sri Lanka secured hundreds of millions of dollars to purchase fuel from India on credit, a much-needed relief amid the island’s worst financial crisis in decades.
• A global funding package is in the works to help low-income nations reduce dirty coal consumption after demand for the fuel surged during the pandemic. 
• Construction began on the world’s largest offshore wind farm in the British North Sea, which could power up to 6 million homes by 2026.
• 3D printing is gaining traction in the oil and gas industry as a means of reducing cost, speeding part manufacturing and decreasing the overall carbon footprint.  

Supply Chain

• New Mexico’s Calf Canyon wildfire, the U.S.’s largest blaze currently, spread to 120,000 acres Monday as 13,000 people prepared to evacuate in the state’s central-northern region. The fire is expected to spread further due to high winds, officials said. 
• The U.S. Purchasing Manager’s Index fell to 69.7 in April, a 16-month low, primarily on a drop in transportation capacity:

• The ports of Seattle and Tacoma saw a 28.1% decline in first-quarter loaded exports from the same time last year, while imports hit an all-time high. 
• Export bookings at the Port of Shanghai are down more than 20% since mid-March. Cargo diversions are creating backlogs at the nearby Port of Ningbo-Zhoushan. 
• The Suez Canal saw a record $629 million in ship fees in April, up 13.6% from the same time last year on a 6.3% gain in ship volumes.  
• UPS will put RFID tags on packages at 100 facilities this year, eliminating millions of manual sorting scans each day. 
• Canada’s Cargojet quadrupled its order for Boeing 777 passenger planes that it plans to convert into cargo carriers. Air Canada is buying two factory-built Boeing 767-300 freighters after cargo revenue rose 42% in the first quarter. 
• Over 1,000 U.S. workers for CNH Industrial, a global supplier of agricultural and construction equipment, walked off the job for the first time in two decades yesterday over failed labor negotiations. 
• Amazon workers voted against unionizing at a facility in Staten Island, New York, dealing a blow to labor organizers after last month’s victory in a separate Staten Island warehouse. 
• Ford is temporarily shutting production at a Mustang plant in Michigan, citing chip shortages. 
• Semiconductor supplier Wolfspeed opened a plant in New York state aimed at compressing chip supply chains for U.S. automakers. 
• India could provide up to half the cost for global chipmakers to build new facilities as the government looks to expand high-tech manufacturing. 
• A Dutch energy firm and a storage specialist are partnering to build out Northwest Europe’s infrastructure for hydrogen imports from sea. 
• British retail giant Tesco will test the use of trucks powered by solar panels on trailer roofs. 
• More supply chain news related to the war in Ukraine:
  • Ukraine’s government formally shut down its seaports that have been closed since late February. 
  • The U.S. cut its outlook for global wheat trade by 3% this year as governments scramble to fill a void from the Black Sea region. 
  • Soba noodles, an iconic low-cost dish in Japan, will see prices rise for the first time in a decade on shortages of Russian buckwheat. 

Domestic Markets

• The U.S. reported 81,644 new COVID-19 infections and 266 virus fatalities Monday. Cases are up in all but three states, with the daily average rising to 56,000 from just 25,000 in early April. 
• COVID-19 cases in California are up 30% the past week. The state’s population fell 0.3% last year due in part to high COVID-19 fatalities and a falling birth rate.  
• More than 1 in 10 people tested positive for COVID-19 in Florida, a two-month high. 
• New York City entered a higher risk category for COVID-19 yesterday, as daily cases are up fourfold from early March. 
• The share of fully vaccinated people dying from COVID-19 is growing as more infectious strains reach older and immunocompromised populations. 
• COVID-19 was the leading cause of death for U.S. law enforcement last year and the third-leading cause of death across the nation. 
• Moderna expects to have ample supplies of its Omicron-tailored COVID-19 vaccine dose by this fall. 
• Airbnb will no longer allow travelers to cancel reservations for COVID-19-related reasons. 
• At 59%, Austin, Texas, has the highest share of workers returning to the office of any major U.S. metro area. 
• U.S. job openings increased from 11.3 million to 11.5 million in March, as 4.5 million people quit or changed jobs during the month.  
• The U.S. Treasury will scale back long-term debt sales for a third straight quarter this month, one of the longest streaks since 2014. 
• The ISM’s index of U.S. manufacturing activity fell to 55.4 in April, its lowest in two years, as sector employment declined sharply. 
• U.S. construction spending grew at a smaller-than-expected rate of just 0.1% last month on a slowdown in commercial construction:

• Almost 90% of consumer-goods companies reporting quarterly earnings have logged profits above analyst estimates. 
• Mortgage borrowers paid 31% more in fees used to lower contractual interest rates last month, one of several methods homebuyers are using to combat decade-high rates. 
• California shelved plans to create a four-day workweek for hourly employees after the bill received little support from lawmakers. 
• Spirit Airlines rejected a $3.6 billion cash takeover bid from JetBlue and will continue plans to acquire low-cost rival Frontier. 
• Penske will buy back more shares after first-quarter profit more than doubled to $367.9 million, as industrywide vehicle shortages bolstered prices. 
• Northrop Grumman reported a 9.6% decline in quarterly revenue for its aeronautics unit, citing labor and supply shortages. 
• A Seattle-based startup is gaining traction with its pickup service for hard-to-recycle items, including batteries, #1 PET plastics and lightbulbs. 

International Markets

• Beijing expanded mass testing and reopened a mass isolation center from 2003’s SARS outbreak as officials scramble to avoid Shanghai-like lockdowns. 
• Civil unrest over indefinite COVID-19 lockdowns is growing in Shanghai as cases decline to under 10,000 per day.
• South African COVID-19 cases tripled last week, raising fears of a fifth virus wave. 
• New Zealand dropped most of its remaining border restrictions and will allow incoming travelers from more than 50 countries for the first time in two years. 
• New COVID-19 cases in Hong Kong fell below 300 for the first time since February. 
• Many South Koreans are choosing to ignore the government’s lifting of an outdoor mask mandate, despite daily case counts declining from recent peaks. 
• The U.S. removed Mexico from its high-risk COVID-19 assessment, a boon for the Mexican tourism industry. 
• More news related to the war in Europe:
  • Russia’s billions of dollars in fiscal support are unlikely to prevent the nation’s sanction-induced economic spiral, economists say. 
  • Russia pulled its involvement with the International Space Station. 
  • The Ukrainian refugee count hit 5.5 million and continues to grow, according to the United Nations. 
• Mexican manufacturing activity remained in contraction territory for the 26th consecutive month, according to a purchasing manager’s index. 
• GDP in Hong Kong fell 4% in the first quarter from the prior year due to COVID-19 disruptions and moderating global demand.  
• Japanese manufacturing activity slowed last month as supply chain disruptions in China weighed on demand. China’s factory activity is contracting sharply:

• Stellantis is putting $2.8 million into reconfiguring two Ontario plants to make new-model electric vehicles. 
• Used car prices in Germany jumped 17% in April as supply shortages hampered production of new vehicles at Mercedes and Volkswagen. 

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