MH Daily Bulletin: October 26

October 26, 2022 • Posted in Daily Bulletin

News relevant to the plastics industry:

At M. Holland

Supply

  • Oil rose marginally Tuesday after Saudi Arabia expressed concerns over supply.
  • In mid-morning trading today, WTI futures were up 2.9% at $87.80/bbl, Brent was up 2.3% at $95.63/bbl, and U.S. natural gas was down 0.3% at $5.60/MMBtu.
  • U.S. crude stocks unexpectedly rose last week, according to the API. Government data is due today.
  • U.S. gasoline futures are at their highest level since late July as domestic demand remains strong and supplies get tighter:
Gasoline - 2022 Data
  • On Tuesday, West Texas natural gas prices dipped below zero for the first time since 2020 as booming production overwhelms pipeline networks.
  • U.S. fracking giant Halliburton saw third-quarter net income more than double from a year ago. 
  • Valero Energy provided a strong start to U.S. refinery earnings season, reporting that demand rose above pre-pandemic levels in the third quarter
  • Energy executives don’t expect any new refineries to be built in the U.S. or shuttered refineries to reopen due to high capital costs, long construction times and a secular shift away from refined products, despite the industry’s current 90% operating rate. 
  • More oil news related to the war in Europe:
    • European natural gas prices are continuing to fall, as unusually warm weather contributes to an unexpected supply glut.
    • European LNG importers are scrambling to find vessels to serve as floating storage for regasification terminals.
    • Russian coal exports to China are up by one-third this year after lockdowns shut down several of China’s coal-producing regions.
    • European imports of Russian LNG jumped 41% in the year through August, a sharp contrast to pipeline flows that have dwindled to a trickle.
    • European makers of metals, chemicals and gases are lowering fourth-quarter forecasts on the impact of surging energy and raw material costs.
  • Iberdrola, Europe’s biggest utility, posted a 29% rise in nine-month profit on strong performance in the U.S. and Brazilian markets and its renewables investments.
  • Canada will spend over $700 million to build a grid-scale small nuclear reactor, a key technology for the nation’s long-term plans to cut emissions.
  • Indonesia, one of the world’s biggest carbon emitters, bumped up its 2030 emissions reduction target by 10 percentage points to 43.2%.
  • BASF maintained its 2022 earnings guidance but said its European operations must be permanently downsized due to sluggish growth, high energy costs and overregulation. 

Supply Chain

Domestic Markets

United States Manufacturing PMI
United States Case Shiller Home Price Index YoY

International Markets

Mexico Economic Activity YoY
  • Bank lending to eurozone companies quickened in September, extending the biggest private borrowing binge in over a decade as firms scramble for liquidity to cover energy costs.
  • Sentiment among German exporters rose slightly in October but was weighed by pessimism from high-energy sectors including chemicals, glassware and metal production.
  • Japan will likely end up spending $170 billion in its upcoming economic stimulus package.
  • China issued new rules meant to boost bank lending to private businesses, Beijing’s latest attempt to support an economy facing multiple headwinds.
  • Taiwan’s industrial output fell 4.8% year over year in September, its first contraction since January 2020 on a sharp decline in manufacturing output:
Taiwan Industrial Production

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