MH Daily Bulletin: May 4
May 4, 2022 • Posted in Daily BulletinNews 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 fell about 2.5% Tuesday on prospects of lower demand from China.
- U.S. natural gas surged 9% Tuesday to the highest level since 2008, as storage levels remain tight and European demand soared to an April record ahead of tightened sanctions that could lower Russian deliveries.
- In mid-morning trading today, WTI futures were up 3.8% at $106.30/bbl, Brent was up 3.7% at $108.90/bbl, and U.S. natural gas was up 4.9% at $8.35/MMBtu.
- More oil news related to the war in Europe:
- The EU proposed a total ban on imports of Russian crude oil within six months and on refined products by year-end, part of the bloc’s sixth package of sanctions against Moscow unveiled this morning.
- Greece and Bulgaria began construction on a new LNG export terminal aimed at diversifying supply to southeast Europe and cutting heavy reliance on Russian gas.
- Half of Ukraine’s 7,000 fuel stations are now closed.
- U.S. crude inventories fell a larger-than-expected 3.479 million barrels last week, according to the American Petroleum Institute. Government data will be released today.
- Qatar overtook the U.S. as the world’s largest LNG exporter in April, as more U.S. refineries went down for maintenance.
- Marathon’s refining margins jumped 51% in the first quarter while capacity utilization also rose, leading to market-beating profits.
- Public exploration and production (E&P) firms are on track to shatter last year’s free cash flow by 70% to $834 billion, Rystad Energy predicts:
- 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.
- Libyan oil exports are at an 18-month low as political protestors continue blocking ports and storage sites.
- India faced its worst power crisis in over six years last month as demand hit a record high and coal supplies fell 7.6%.
- Over 1,000 climate protestors and counting have been arrested in just the past month while trying to block oil terminal operations in Britain.
Supply Chain
- Truck-stop diesel prices hit a record $5.32 a gallon yesterday, up $1.57 since early February.
- At an emergency meeting last week, U.S. rail customers pressed federal regulators to address deteriorating rail service.
- American ocean carrier UWL will launch a bi-weekly express service from Ho Chi Minh City to the Port of Seattle later this month, which the firm says will be the fastest trip from Vietnam to the U.S.
- Bain Capital and Dallas-based Barber Partners plan to spend $500 million to construct up to 15 new refrigerated warehouses across the U.S. by 2027.
- Drewry Shipping Consultants boosted its forecast for collective container-line profits this year by 50% to $300 billion.
- In the latest supply chain news from first-quarter earnings season:
- Maersk’s ocean business revenue grew 64% to $15.6 billion despite a 7% volume decline.
- BNSF’s revenue hit $5.97 billion, up 10% from last year despite a 3% volume decline.
- Norfolk Southern’s average revenue per intermodal unit hit $854 million, up 18.8% from a year ago despite a 6% decline in volume.
- Ryder System’s first-quarter profit more than tripled to $175.6 million on 28% growth in revenue.
- Danish freight forwarder DSV upped its full-year guidance after doubling its first-quarter profit.
- U.S. tariffs on over $350 billion in Chinese imports are set to expire in July unless enough industries request a review, administration officials said.
- Container throughput at China’s Port of Ningbo-Zhoushan likely surpassed 3 million TEUs in April, an all-time high for one of the world’s largest ports.
- Computer chip shortages are even impacting semiconductor makers, who could be waiting years in some cases for new equipment to boost production.
- April vehicle deliveries slipped 23% at Toyota, 40% at Honda, 20% at Hyundai and 16% at Kia due to production shortfalls.
- At least $3 billion of last year’s $1 trillion U.S. infrastructure bill will go toward financing the U.S. electric-vehicle industry, officials said.
- Prices for aluminum and tin are down over 17% from recent all-time highs as Chinese lockdowns erode demand.
- The market for supply-chain artificial intelligence could be worth $20 billion in the next five years, according to research firm Gartner.
- The ports of Los Angeles and Long Beach will test 100 electric trucks in container operations this year.
- Macy’s is accelerating a rollout of small retail stores aimed at facilitating e-commerce purchases and offering small batches of brand new inventory.
- More supply chain news related to the war in Ukraine:
- The EU’s sixth sanctions package would penalize Belaruskali OAO, the world’s second-largest producer of key fertilizer ingredient potash.
- South African miners are shipping more coal by truck as clogged railroads hamper opportunities to meet growing European demand.
- Russia issued a broad decree yesterday that will forbid exports of products and raw materials to a list of countries to be released in the next few days.
Domestic Markets
- The U.S. reported 61,743 new COVID-19 infections and 745 virus fatalities Tuesday.
- COVID-19 cases rose at least 50% last week in eight states, including Washington, Georgia, Maine and Hawaii.
- COVID-19 cases among American children were 61% higher last week than the two weeks prior.
- New York state officials warned of two new subvariants of Omicron spreading about 25% faster than the BA.2 subvariant. The new subvariants now account for over 90% of infections in central New York. Research suggests the variants are better able to dodge immunity from vaccination or previous infection.
- A new wave of COVID-19 erupted just five days after Puerto Rico lifted all restrictions, with daily cases now around 4,000 compared to 200 in March.
- The CDC maintained recommendations that travelers wear masks in airplanes, trains and airports despite a legal challenge that struck down the agency’s mandate.
- Studies suggest that severe COVID-19 infection can age the brain by up to 20 years in some people and erode IQ by 10 points.
- Three top officials with the FDA suggested the post-pandemic “normal” could include an annually updated COVID-19 shot alongside a seasonal flu shot.
- The Federal Reserve is expected to deliver its first half-percentage-point rate hike since 2000 today, along with plans to start reducing its $9 trillion asset portfolio that more than doubled during the pandemic.
- Consumer and tech firms that surged during pandemic-era lockdowns have lost hundreds of billions in market value in recent weeks.
- Poorer tech earnings and a combination of economic headwinds led to one of the worst stock market routs in a decade last month:
- The U.S. will extend by 1.5 years the expiring work permits of hundreds of thousands of immigrants, a bid to aid worker shortages.
- The median price for a single-family home hit $368,200 in the first quarter, up 15.7% from the same time last year. Foreclosure filings are up 132% from a year ago.
- In the latest news from first-quarter earnings season:
- Pfizer saw first-quarter sales rise a larger-than-expected 77% to $25.7 billion, driven by sales of pandemic products.
- U.S. car renter Avis posted a 77% rise in first-quarter revenue to $2.4 billion, an all-time high.
- Despite promising revenue gains from first-quarter ridership, shares of ride-hailer Lyft fell 26% in late trading yesterday after it said it would boost spending in the current quarter to attract and retain drivers, raising concerns about operating profit.
- Airbnb expects to post its first full-year net profit after first-quarter revenue climbed 70% on high demand for longer stays at expensive suburban rentals.
- Cosmetic maker Estee Lauder sharply cut full-year sales forecasts as lockdowns hamper demand in China, one of its biggest markets.
- Global insurance conglomerate AIG saw profits rise almost 10% on fewer catastrophe losses and higher premiums, while Prudential swung to a $31 million loss on investment losses and charges related to high interest rates.
- Electric-vehicle startup Rivian will get $1.5 billion from the state of Georgia for a massive new factory near Atlanta.
- A Washington battery startup is building a new factory in Moses Lake, Washington, which could produce more efficient batteries for some 500,000 electric vehicles by 2025.
- Google, Tesla and a variety of private equity investors have pumped $2 billion into carbon-removal technology in recent months.
International Markets
- Beijing shut part of its subway system and is requiring a negative COVID-19 test for access to most public places, including businesses, while continuing to mass-test residents to avert a lockdown like Shanghai’s. Meanwhile, authorities in the main industrial center of Zhengzhou, a city of over 10 million, closed schools and imposed mandatory remote working for the next week.
- Africa’s only COVID-19 vaccination plant may shut down due to a lack of orders.
- Italy dropped proof-of-vaccination requirements for indoor businesses yesterday.
- Economists expect Europe’s 10-year inflation rate to surpass that of the U.S. for the first time in a decade.
- Brazil’s inflation rate topped 12% in April, as Central Bank employees began striking over wage stagnation leading to lost purchasing power.
- More news related to the war in Europe:
- Moscow again narrowly avoided default by satisfying dollar payments on over $650 million in government bonds due today.
- The war in Ukraine promises to further increase global hunger after the number of people suffering acute food shortages surged 25% last year.
- Irish carrier Avolon reported a $304 million impairment charge due to the loss of 10 jets stuck in Russia.
- The estimated cost to rebuild Ukraine from war is $600 billion and counting, according to officials.
- Companies would have to set a much broader range of sustainability targets under a new proposal for European reporting standards, unveiled yesterday.
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