MH Daily Bulletin: October 31

October 31, 2022 • Posted in Daily Bulletin

News relevant to the plastics industry:

At M. Holland

  • The use of recycled material was previously limited to plastic products that did not require color. Luckily, new products made from post-consumer recycled (PCR) materials, like carrier resins for masterbatches from M. Holland, can be colored. These resins enable companies to incorporate recycled plastics into their sustainability strategies. Click here to read the blog post.
  • 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 prices fell 1% Friday after top importer China widened its COVID-19 curbs.
  • In mid-morning trading today, WTI futures were down 1.1% at $86.97/bbl, Brent was down 0.8% at $94.97/bbl, and U.S. natural gas jumped 10.2% to $6.26/MMBtu. 
  • Natural gas prices are down 40% since late-August highs amid unusually warm autumn weather.
  • The number of active U.S. oil and natural gas rigs declined last week while notching their first monthly increase since July.
  • Diesel prices in the U.S. northeast are at a significant premium to the national average due to low inventories in the region. 
  • Four of the five largest global oil companies combined for nearly $50 billion in profit last quarter, fueling support for a windfall tax.
  • U.S. shale producer Pioneer Natural Resources says it will reshuffle its drilling portfolio next year after third-quarter output fell 9%.
  • U.S. frackers in some parts of the Permian basin are butting heads with miners working to boost production of potash, a key crop nutrient.
  • U.S. coal-fired electricity generation is forecast to fall 6% from 2021 levels:
U.S. coal-fired generation declining after brief rise last year

Supply Chain

Domestic Markets

  • The U.S. averaged 37,985 new daily COVID-19 infections last week, up from 37,258 the prior week. The seven-day average for virus deaths rose to 378 from 367 a week ago.
  • A “variant soup” is driving new COVID-19 cases in New York City and elsewhere.
  • U.S. flu hospitalizations are at their highest level for this time of year in over a decade.
  • A recent study suggests that AstraZeneca’s COVID-19 vaccine is 30% more likely to cause a rare blood clot among recipients compared to the shot made by Pfizer.
  • U.S. equities received their biggest inflow in four months last week on hopes that the Federal Reserve will slow the pace of interest-rate hikes. Some bankers, including Goldman Sachs, see rates hitting 5% by March.
  • Technology shares have led this year’s stock market rout in a performance similar to the tech bubble of 2000-2002:
Tech Rout Wipes Out $700 Billion in Market Cap
  • The level of distressed corporate debt in the U.S. has risen for five straight weeks as businesses that loaded up on cheap borrowings during the pandemic now must refinance at much higher rates.
  • U.S. consumer spending rose 0.6% in September, according to the Commerce Department:
United States Personal Spending
  • Wage and benefit costs rose 5% in the third quarter as employers competed for workers in a tight labor market. Real wages were flat when factoring for inflation.
  • Almost a quarter of firms posting quarterly results are coming up short of expectations, new data shows.
  • U.S. pending home sales fell 10.2% in September, the sharpest decline since early in the pandemic.
  • U.S. credit-card debt hit $916 billion in September, reaching pre-pandemic levels for the first time.
  • The Federal Reserve is a victim of its own rate hikes as interest outflows it pays on money market funds exceed income it receives from its bond portfolio. 
  • Bankrupt cosmetics giant Revlon is entertaining sale offers as a way to exit from Chapter 11 as soon as possible.
  • Bed Bath & Beyond is seeking to win back brands after a failed overhaul under prior management that led to plunging sales.
  • A drive to unionize new Starbucks cafes is slowing as the coffee chain doles out more pay and expanded benefits to non-unionized cafes.

International Markets

  • China on Saturday reported a fifth straight day of more than 1,000 new COVID-19 cases, triggering more curbs and restrictions across the country. Shanghai locked down as it conducted mass testing for the 1.3 million people of its main business district.
  • China abruptly locked down Shanghai Disney today, trapping visitors inside until they can test negative for COVID-19.  
  • China’s pandemic restrictions on business and social activity are impacting 9.2% of the nation’s GDP.
  • Macau quarantined all staff and customers inside an MGM casino after a dealer tested positive for COVID-19.
  • Brazil’s liberal opposition candidate narrowly won the presidency after the nation suffered among the worst COVID-19 fatality levels under his conservative predecessor. 
  • Fewer than 20% of Canadians have gotten updated COVID-19 boosters tailored to the Omicron variant.
  • China’s factory activity took a surprise turn downward into contraction territory in October, according to official data. The nation’s services activity also fell for the first time since May.
  • The International Monetary Fund expects China’s GDP growth to slow to 3.2% this year, a downgrade of 1.2 points from its April projection, after the nation saw an 8.1% rise in 2021.
  • The Eurozone annual inflation rate rose to 10.7% in October. Inflation climbed to 11.6% in Germany, 7.1% in France, 7.3% in Spain and 12.8% in Italy.
  • Germany’s economy saw a surprise expansion of 0.3% in the third quarter.
  • Britain is widely expected to raise its benchmark interest rate by 75 basis points when its central bank meets this Thursday, Nov. 3.
  • Japan’s factory output fell 1.6% from August to September, worse than expectations.
  • The Japanese yen fell more than 1% Friday after the Bank of Japan bucked the trend among other major central banks and stuck with ultra-low interest rates.
  • Japan’s cross-border e-commerce is booming as smaller companies join the market to take advantage of the yen’s sharp decline and technology advances.
  • One million employees in Belgium will receive an automatic pay raise of 11.59% in 2023 due to the country’s record inflation.
  • Ryanair ground handlers called off plans to strike at Spanish airports this month as contract negotiations advance.
  • Finnair posted a $35.1 million third-quarter profit, its first of the pandemic.
  • Mexico is making progress toward recovering its Category 1 aviation rating that was revoked 1.5 years ago, according to the U.S. FAA.
  • China Southern Airlines canceled plans to fly Boeing 737 MAX jets over the weekend, what would have been the aircraft’s first return to China in over three years.
  • Asian online apparel seller Shein, just a decade old, is on track to generate $24 billion in revenue this year and close its sales gap with fast-fashion giants Zara and H&M.
  • Shopify’s third-quarter operating loss narrowed after posting a revenue jump of 22%.

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