MH Daily Bulletin: October 24

October 24, 2022 • Posted in Daily Bulletin

News relevant to the plastics industry:

At M. Holland

  • During M. Holland’s recent Plastics Reflections webinar, our panelists discussed the macroeconomic factors influencing global and domestic economies — including what it means for suppliers, distributors and manufacturers in the plastics industry. In case you missed it, click here to gain access to the full recording.
  • A recent Plastics News article focuses on M. Holland’s distribution of Purell medical-grade resins from LyondellBasell. Click here to read the article.

Supply

  • Oil rose Friday, with Brent ending the week higher and WTI ending the week slightly down. U.S. natural gas fell over 25% in its ninth straight weekly decline.
Natural gas - 2022 Data
  • In mid-morning trading today, WTI futures were down 0.1% at $84.94/bbl, Brent was down marginally at $93.48/bbl, and U.S. natural gas was up 3.9% at $5.15/MMBtu.
  • Active U.S. drilling rigs rose by two last week, with oil rigs at their highest level since March 2020.
  • Refined fuel exports from China rose 36% year over year in September, while crude imports fell by 2%, indicating continuing weakness in the domestic economy. Refinery output was up 1.9% year on year to 56.81 million tonnes, its first year-on-year rise since last November.
  • Oil market volatility will dampen incentives for U.S. producers to boost crude output in order to refill government reserves, experts say.
  • France is falling behind in its winter energy preparation, with almost half its nuclear reactors offline for maintenance and over 10% of gas stations still short on supply due to worker strikes.
  • U.S. natural gas production and exports hit record highs in 2021:
In 2021, both U.S. natural gas production and exports set new records

Supply Chain

Domestic Markets

  • The U.S. averaged 37,258 new COVID-19 infections last week, down from 37,808 the prior week. The seven-day average for virus deaths rose to 367 from 332 a week ago.
  • Cases of COVID-19 stemming from the BQ.1 and BQ.1.1 Omicron subvariants are estimated to account for 16.6% of cases in the nation as of last Friday, nearly doubling from a week earlier.
  • Pfizer’s plan to potentially quadruple U.S. prices for its COVID-19 vaccine next year could spur strong revenue for years despite falling booster demand.
  • The pandemic took a toll on learning; results from the first national academic proficiency test since 2019 indicate math scores fell at the highest pace on record and reading scores fell to 1992 levels. 
  • Policymakers see U.S. interest rates rising to a median of 4.6% next year, with a 75 basis-point hike expected at the Federal Reserve’s next meeting on Nov. 1-2. U.S. stock markets jumped higher last week on word that the central bank may consider softening its interest-rate increases.
  • Quarterly earnings are projected to fall 3.5% from a year ago for the S&P 500, excluding the energy sector. Nearly one-third of the index is due to report this week, including the nation’s largest tech firms.
  • The U.S. budget deficit shrank almost 50% from FY 2021 to FY 2022 on lower COVID-19 relief spending and surging receipts.
United States Government Budget

International Markets

  • The IMF warned that the global wave of interest-rate hikes will not have their peak effect on inflation until three or four years from now.
  • A new survey shows that 71% of European consumers across six key markets are cutting back spending on everyday items, including food, in an effort to manage surging inflation throughout the bloc.
  • Eurozone business activity contracted for a fourth straight month in October, with S&P Global’s composite purchasing managers index falling to 47.1, down from 48.1 in September.
  • Consumer confidence in both the euro area and Britain rose slightly in October but remained near record lows.
  • British retail sales dropped a larger-than-expected 1.4% from August to September. Ratings agency Moody’s lowered the nation’s outlook from “stable” to “negative” due to ongoing political turmoil. 
  • Japan intervened in the foreign exchange market for the second time in a month on Friday to prop up its currency, while lawmakers separately considered a stimulus package of $100 billion or more to cushion fuel and raw material prices.
  • South Korea is expanding its corporate bond-buying program and taking other liquidity supply measures amid growing worries about a credit crunch.
  • Mexican inflation likely slowed in the first half of October, but not enough to slow its central bank’s monetary tightening policy. 
  • Argentina’s central bank kept its benchmark interest rate at 75% last week following better-than-expected inflation data for September.
  • China’s president secured a precedent-breaking third leadership term Sunday, cementing power in one of the strongest administrations since Mao Zedong. China’s stock markets fell to a 14-year low on concerns about the concentration of authority.

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