MH Daily Bulletin: October 13

October 13, 2022 • Posted in Daily Bulletin

News relevant to the plastics industry:

At M. Holland

  • Plastics News interviewed experts at M. Holland about how material and chemical suppliers are working to meet automotive OEM demands for both electric and internal combustion vehicles amid an ongoing market shift. Click here to read the article!
  • M. Holland, in collaboration with LyondellBasell, will boost medical packaging manufacturers’ access to medical-grade resins and help ensure regulatory confidence for OEMs. Click here to read the full press release.

Supply

  • Oil fell for a third day Wednesday, settling down 0.5% on prospects of lower demand.
  • In mid-morning trading today, WTI futures were up 0.1% at $87.37/bbl, Brent was up 0.2% at $92.60/bbl and U.S. natural gas was up 0.7% at $6.48/MMBtu.
  • U.S. crude stockpiles saw a large build of 7 million barrels last week following another release from strategic reserves, the API said. Government data is due today.
  • The EIA downgraded its forecast for U.S. oil demand and production growth this year and next. Power consumption, on the other hand, will hit a record-high this year before cooling off slightly next year.
  • U.S. natural gas production rose by 3.5% in 2021 to a new annual record:
U.S. natural gas production set a new record in 2021

Supply Chain

  • U.S. container imports likely hit 2.215 million TEUs in September, down 11% from a year ago.
  • Maersk and MSC are canceling more Asia-to-Europe sailings on falling container demand.
  • Slowing freight demand is cooling the M&A market for logistics.
  • Businesses are revamping warehouses with amenities in a bid to attract and retain talent.
  • Liverpool dock workers resumed striking this week as their employer laid off 15% of staff.
  • Worker strikes are slowing operations at South Africa’s Durban port, one of the busiest on the continent.
  • Seaborne piracy has fallen to its lowest level of activity since 1992.
  • Maersk is on track to double its net income from 2021 to a record $29.3 billion this year.
  • Orient Overseas Container Line saw a 21.1% rise in average TEU rates in Q3, leading to a 16.9% jump in revenue.
  • China’s state-owned Cosco Shipping expects operating earnings in the first three quarters of the year to reach $20 billion.
  • Applied Materials, a leading U.S. producer of chipmaking equipment, says the government’s new export restrictions prohibiting sales to Chinese chipmakers will result in $250-$550 million in losses this quarter. Other top equipment-makers have started pulling employees from Chinese chip firms or halting service to Chinese customers. Meanwhile, some foreign companies with plants in China, who were supposed to be exempt from the restrictions, have been blocked from supplying even basic items like light bulbs, springs and bolts to their facilities there.
  • The U.S. administration is briskly approving exemptions for some Asian chipmakers in a bid to limit disruption from its tightened export rules aimed at China.
  • Aluminum prices spiked 7% Wednesday after the U.S. government said it was considering restricting Russian imports of the metal.
  • U.S. regulators are proposing a rule requiring container lines to thoroughly document their demurrage charges to shippers.
  • In the latest news from the automotive industry:
  • A Morgan Stanley survey of major retailers revealed the lowest net ordering levels in its 12-year history and a 19% gap between inventory and sales growth levels. 
  • Boeing finalized a $4.1 billion order for 10 new freighters from Luxembourg-based Cargolux airline.
  • Airbus says its recent move to delay full production on some aircraft has eased pressure on suppliers, although some are still pausing operations in Europe due to high energy bills.
  • Dutch health-tech firm Philips expects core profit to drop 60% this quarter largely due to supply chain issues.
  • The U.S. arm of Japan’s Kobe Steel signed a supply agreement with Sweden’s H2 Green Steel, which aims to build a new steelmaking plant running entirely on hydrogen power.
  • Lead will continue outperforming other metals on the London Metal Exchange in the coming months due to tight supplies and as cold weather forces consumers to replace car batteries, analysts say.
  • American wheat exports will hit a 50-year trough as low water levels on the Mississippi River make it slower and more expensive to get crops to export terminals. Though cleared in some areas, river bottlenecks are widespread and spilling over into major tributaries such as the Ohio River.
  • The United Nations is asking for faster inspections of Ukrainian grain vessels as a flood of outgoing ships overwhelms regional ports.
  • China is poised to upend normal trade flows and start importing corn from Brazil instead of the U.S.

Domestic Markets

The Fed Is Moving Historically Fast to Tame Inflation
  • Bank of America leadership says U.S. consumers are in good financial health with high savings rates and solid spending growth this month.
  • U.S. producer prices rose a surprise 0.4% in September, led by higher food prices and home-heating costs. Meanwhile, prices for core goods were unchanged, the weakest reading in 2.5 years.
United States Producer Price Inflation MoM
  • U.S. business groups are gearing up for a court battle over the White House’s proposed rules that would make it harder for gig companies to use independent contractors.
  • U.S. mortgage rates have more than doubled year to date and are now at their highest level since 2006 at around 6.81%.
  • PepsiCo saw higher third-quarter sales after it raised the average price on its snacks and drinks by 17% compared to a year ago.
  • U.S. airlines are seeing the strongest consumer demand in three years despite a 33% year-over-year rise in airfares.
  • Amazon plans to use rockets from a Boeing-Lockheed joint venture to launch its first internet-from-space satellites.
  • In 2020, New York City’s booming tech industry saw a net gain of 14,340 jobs compared to a 12.6% decline in total private-sector employment.

International Markets

  • COVID-19 cases rose 8% last week in Europe, leading the WHO to warn of a new virus wave.
  • With COVID-19 cases tripling in China after its National Day holiday, the central government is reimposing restrictions in numerous cities, including Shanghai, which has been selectively closing schools, gyms and entertainment venues, sparking fears of another total lockdown.
  • The topic of COVID-19 was noticeably absent from World Bank and IMF annual meetings on global financial conditions this week.
  • The IMF predicts Ukraine will need at least $3 billion a month next year to finance its wartime economy.
  • Britain’s economy is headed for recession after data showed an unexpected contraction in August, led by weakness in manufacturing and North Sea oil and gas production.
  • British banking officials will abruptly end emergency bond-buying in the next few days despite continued liquidity risks at the nation’s massive pension funds.
  • EU central bank officials are closing in on a lending change that could potentially shave off tens of billions of euros in bank profits, according to reports.
  • Euro zone industrial production rose 1.5% month over month in August, handily beating forecasts.
  • India’s industrial output fell for the first time in 1.5 years in September.
  • Argentina’s inflation rate eased in September but the nation is still on track to see a 100% rise in prices for the full year.
  • A consortium of mostly domestic firms led by Japan Industrial Partners is in talks to buy Toshiba for roughly $19 billion.
  • Europe will keep its waiver on airport slot-use requirements until the end of winter due to continued disruption from Russia’s war in Ukraine.
  • LATAM Airlines unveiled an $8 billion financing plan that could see the embattled carrier exit from bankruptcy by November.

Some sources linked are subscription services.

Stay informed with industry trends and insights.

Stay informed with industry trends and insights.
This field is for validation purposes and should be left unchanged.