MH Daily Bulletin: October 28
October 28, 2022 • Posted in Daily BulletinNews relevant to the plastics industry:
At M. Holland
- A recent Plastics News story highlights business insight from M. Holland’s Plastics Reflections webinar. Click here to read the article, which examines the various challenges facing international resin markets, including the economy, inflation, high inventories, reshoring and more.
- M. Holland is sponsoring the Association of Rotational Molders (ARM) Annual Meeting in Atlanta on Nov. 6-9! Please stop by Booth #19 to meet our team of Rotational Molding experts and learn more about our product offerings and grinding capabilities.
Supply
- Oil rose about 1.3% Thursday on optimism over record U.S. exports.
- In mid-morning trading today, WTI futures were down 0.9% at $88.18/bbl, Brent was down 1.0% at $96.02/bbl, and U.S. natural gas was down 3.5% at $5.67/MMBtu. Prices are headed for a weekly gain of around 3%.
- Combined U.S. exports of crude oil and refined petroleum products surged to a record 11.4 million bpd last week.
- In petrochemicals earnings news:
- Exxon Mobil beat third-quarter earnings estimates, reporting $19.7 billion in net income, a record.
- Chevron reported third-quarter net income of $11.2 billion, beating expectations with its second highest quarterly profit on record.
- Shell posted near-record quarterly profit of $9.45 billion and said it would raise dividends for the fifth time of the pandemic this fall.
- TotalEnergies saw record quarterly profit of $9.9 billion, while booking another massive charge of $3.1 billion for its exit from Russia.
- PetroChina, Asia’s largest oil and gas producer, saw profit jump 60% to $16.66 billion between January and September, while China National Offshore Oil Corp (CNOOC) saw an 89.1% profit surge in the third quarter.
- Oil firms are preparing to abandon Venezuela following years of underinvestment and mismanagement spurred by U.S. sanctions.
- More oil news related to the war in Europe:
- U.S. and Western officials are reportedly finalizing plans to impose a cap on Russian oil prices.
- Europe slashed its gas use by roughly 15% in August and September as industries cut production in response to soaring prices.
- Europe is facing a diesel shortage after high natural gas prices caused some users to switch to diesel, boosting demand, while others shunned diesel from Russia, denting supply.
- Europe’s natural gas storage is filled to 93.6% of capacity, the third-highest fill rate on record.
- Russia is flooding Asian markets with high-sulfur fuel oil ahead of the EU’s looming embargo on its energy exports.
- Ukrainian cities may have to cut electricity supplies for longer than planned as Russia continues to strike the nation’s energy infrastructure.
- TerraPower, a small nuclear reactor company backed by Bill Gates, is looking at building five additional reactors in the U.S. West by 2035.
- Linde, the world’s largest industrial gases firm, says U.S. investment opportunities could top $30 billion over the next decade as lawmakers push bills to speed up the energy transition.
- France’s Engie has acquired over 6 GW of North American green power capacity.
- The China-backed Asian Infrastructure Investment Bank is cautioning against governments dropping renewables targets for short-term energy security.
- By 2030, annual investment in renewables must triple to $1.3 trillion per year if the world is to reach long-term net-zero emissions, experts say.
Supply Chain
- Over 12,000 Airbus staff in Spain will indefinitely strike starting Monday, Oct. 31, over a contract dispute.
- Workers are being quarantined at a Foxconn iPhone factory in Zhengzhou, China, to maintain production despite a spreading COVID-19 outbreak.
- Transpacific container rates have fallen to pre-pandemic levels, according to freight data providers.
- Cargo traffic on Asia-Pacific airlines dropped 10.4% in September from a year ago.
- Old Dominion Freight Line’s third-quarter profit jumped to $377.4 million as higher prices offset falling less-than-truckload volume.
- Norfolk Southern’s quarterly revenue jumped 24% from a year ago to $958 million.
- Intel cut its full-year outlook after quarterly sales dropped 20% and warned it will start laying off staff to cut costs.
- South Korean chipmaker SK Hynix may sell its manufacturing operations in China after the U.S. cracked down on tech exports to the country.
- In the latest news from the auto industry:
- Tesla is under criminal investigation over claims that its electric vehicles can drive themselves.
- Tesla’s Model Y was Europe’s best-selling car in September, surpassing even the most popular combustion-engine models.
- The EU reached a deal to effectively ban new combustion-engine cars starting in 2035.
- EV charging stations now outnumber gas stations 10-to-1 in Manhattan.
- Volkswagen and Germany’s Continental pledged major investments in Mexico totaling nearly $1 billion this week.
- Car retailer AutoNation’s quarterly profit fell 7% due largely to lower used-car prices.
- BMW announced plans to spend $1.7 billion on scaling electric vehicle production in the U.S., particularly in South Carolina.
- Lear Corp will open an $80 million plant in Michigan to supply GM with electric vehicle battery components.
- Ryder System saw a 78% profit gain in the most recent quarter from a year ago on rebounding sales in the automotive supply chain.
- Revenue at Hertz jumped 12% in the third quarter amid strong demand for leisure travel and persistently tight car supply.
- Production delays will push back Polestar’s highly anticipated electric-crossover debut in the U.S. by several months.
- Nissan could take a 15% stake in Renault’s planned electric vehicle unit as the two firms overhaul their decades-old partnership.
- Volkswagen will expand its cooperation with Intel’s Mobileye unit after pulling out of self-driving startup Argo AI.
- Rising warehouse automation is revamping the character of blue-collar jobs.
- Germany approved Cosco Shipping’s purchase of a scaled-back 24.9% stake in the Port of Hamburg.
- MSC and Tradepoint Atlantic announced plans to build a new container terminal at the Port of Baltimore.
- Cessna jet-maker Textron will miss delivery targets this year due to supply-chain issues.
Domestic Markets
- The U.S. reported 56,669 new COVID-19 infections and 539 virus fatalities Thursday.
- Respiratory illness is surging in the U.S. after two years of pandemic restrictions reduced people’s immunity.
- Subvariants of Omicron are more likely to evade antibody drugs, new research shows.
- Up to one-third of people who recovered from COVID-19 saw symptoms rebound several weeks later.
- Remote-work positions on LinkedIn are dropping even as demand for the jobs rise, new data shows.
- The Personal Expenditure price index rose 6.2% in the year that ended in September and the Employment Cost Index rose 1.2% in the latest quarter, indicating inflation pressures continue.
- The Federal Reserve is widely expected to deliver another 75-basis-point interest-rate hike at its meeting next week.
- U.S. goods imports expanded 0.8% in September while exports fell 1.5% in the third straight monthly decline.
- U.S. wholesale inventories rose 0.8% from August to September, the 26th month of growth:
- New orders for U.S.-made capital goods unexpectedly fell by 0.7% in September, suggesting a loss of momentum in business spending on equipment.
- U.S. mortgage applications fell 1.7% last week, the fifth week of declines, as interest rates topped 7% for the first time in 20 years.
- In the latest news from earnings season:
- Amazon posted its first quarterly profit of 2022 but warned of a sharp slowdown in current-quarter sales amid widespread economic uncertainty.
- Apple saw record revenue of $90.1 billion in the third quarter despite a miss on iPhone and services sales.
- Facebook parent Meta lost nearly 25% of its market value Thursday, or $85 billion, just a day after reporting falling revenue and climbing costs.
- Caterpillar’s sales climbed by 21% as the company sold more equipment at higher prices for the construction and energy markets.
- Unilever raised its full-year outlook after lifting prices by an average of 12.5% in the third quarter, making up for a modest decline in unit sales.
- Southwest Airlines said delivery delays for its Boeing jet orders prevented it from fully capitalizing on strong travel demand in the third quarter.
- Comcast posted a dip in quarterly revenue as a slowdown in its media segment offset strong growth elsewhere.
- Defense contractor Northrop Grumman said full-year results would be on the lower end of forecasts amid lingering supply-chain snags and higher costs.
- Merck raised its outlook after posting a 14% rise in sales, led by growing demand for its oncology treatments.
- Gilead Sciences’ third-quarter profit and sales blew past estimates on strong demand for its COVID-19 treatments.
- Anheuser-Busch InBev, the world’s largest brewer, saw better-than-expected earnings on strong sales in Mexico and South Africa.
- McDonald’s smashed quarterly targets but said it is bracing for an economic downturn in the U.S. and Europe.
- Mastercard topped quarterly expectations even as spending growth slowed to its lowest level in more than a year.
- Carbon became the latest prominent 3D printing company to announce staff reductions in the face of an industry slowdown.
International Markets
- All 1.3 million residents of Shanghai’s downtown district have been confined to their homes while authorities conduct mass testing as China continues enforcing its zero-COVID policy.
- COVID-19 disrupted global efforts to contain tuberculosis, leading to the first rise in deaths from the disease in many years.
- Seven in 10 Britons say they are cutting back on holiday spending due to rising living costs, while another survey shows the portion of Brits with no discretionary income doubled over the past nine months.
- Profits for China’s industrial firms fell a steeper-than-expected 2.3% in the first nine months of 2022.
- China’s economy is facing growing risks of slowing external demand in the fourth quarter, officials said publicly. In an annual survey of U.S. business executives in China, sentiments about the nation’s economic outlook hit an all-time low.
- The Bank of Japan maintained short-term interest rates in negative territory.
- China’s Huawei Technologies posted modest quarterly growth on steady demand in its IT infrastructure business.
- China Southern Airlines added the Boeing 737 MAX back to its schedule in what would be the jet’s first commercial passenger flight in China since regulators grounded it in 2019.
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