MH Daily Bulletin: September 2
September 2, 2022 • Posted in Daily BulletinNews relevant to the plastics industry:
At M. Holland
- During M. Holland’s recent summer internship program, 15 bright college students worked both in-person and remotely across many departments. Click here to read more about their experiences at M. Holland and their perspectives on the plastics industry.
- M. Holland’s latest logistics outlook examines current challenges and industry trends that are impacting shipping, trucking and rail. Although the plastics industry is faring a little better than earlier this year, M. Holland’s experts predict disruption to continue well into 2023. Click here to read the full outlook for the remainder of 2022.
- M. Holland will be attending the North American Detroit Auto Show on Sept. 14-15. This annual showcase for emerging automotive technologies will be held at Huntington Place in Detroit, Michigan. If you’re attending, please RSVP for M. Holland’s reception or contact Mike Gumbko, Strategic Account Manager, to set up a meeting with our Automotive team.
- M. Holland will be closed Monday, Sept. 5, in observance of the Labor Day holiday.
- Market Expertise: M. Holland offers a host of resources to clients, prospects and suppliers across nine strategic markets.
Supply
- Oil prices fell over 3% Thursday on news of more COVID-19 lockdowns in China.
- In mid-day trading today, WTI futures were up 0.7% at $87.23/bbl, Brent was up 1.2% at $93.44/bbl, and U.S. natural gas was down 4.4% at $8.86/MMBtu.
- The average U.S. gasoline price is down for the 11th straight week to $3.81 a gallon, roughly 25% lower than mid-June’s record.
- California lawmakers overwhelmingly voted to keep the state’s last nuclear power plant open for another five years after its scheduled shutdown in 2024.
- Exxon Mobil and Shell sold their California oil and gas joint venture Aera on Thursday for $4 billion, ending a 25-year partnership that was one of the state’s largest oil producers.
- OPEC+ is expected to keep its October crude output target stable when the group meets early next week to review market conditions.
- Chevron formally asked the U.S. government to expand its license to operate in heavily sanctioned Venezuela, a potential avenue to bring more of the nation’s crude to global markets.
- Brazil’s Petrobras will cut gasoline prices by 7% today, the fourth price reduction since mid-July.
- France’s president indicated a Western nuclear deal with Iran could come within days, potentially unlocking more of the nation’s crude for export. However, the U.S. said Iran’s written response to a draft agreement was “not constructive.”
- Solar panel shipments in the U.S. hit a record high in 2021, representing 28.8 million kilowatts of capacity:
- More oil news related to the war in Europe:
- G7 nations are poised to unveil a plan today to cap prices for global purchases of Russian oil, a measure the U.S. hopes will ease energy markets and slash Moscow’s war-sustaining revenue.
- Europe’s largest nuclear power plant in southeastern Ukraine partially shut down Thursday due to shelling from occupying Russian forces.
- German officials expect Russia to halt shipments of gas on the key Nord Stream pipeline this winter.
- India is starting to import large volumes of Russia’s Far Eastern crude that historically went to China, further upending global trade flows.
- European plans to lower consumer energy bills could include capping the price of energy that comes from renewables, according to reports.
- Britain announced it will invest $700 million to help build a new nuclear plant as part of the nation’s goal to triple nuclear capacity by 2050.
- Stress tests on Germany’s power grid suggest the nation should extend the lifespan of two of its three remaining nuclear reactors beyond the end of 2022 due to a growing energy crunch.
- Turkey raised natural gas prices by up to 50% for industrial consumers on Thursday due to fallout from the war in Ukraine.
Supply Chain
- Super Typhoon Hinnamnor, a category 5 storm packing 160 mph winds, is aimed to strike China, Japan and South Korea this weekend.
- California’s grid operator is asking residents to avoid charging electric vehicles as triple-digit temperatures are set to bake much of the state through Labor Day weekend.
- European officials say the continent is on pace for its driest year in five centuries, with almost two-thirds of the region under drought warnings or alerts. Britain saw its hottest summer in records going back to 1884.
- New COVID-19 restrictions in China’s major cities could further depress factory operations of global manufacturers, including Foxconn, Toyota and Volkswagen.
- British train drivers are planning their third strike in three months on Sept. 15 in a dispute over pay.
- Long-term ocean freight rates climbed 4.1% in August and are now 121.2% higher than a year ago, bucking the recent softening in the spot market.
- A crude tanker briefly grounded in the Suez Canal Thursday, shutting transport for about five hours.
- The East Coast’s largest Port of New York and New Jersey delayed implementing new container-dwell fees set to take effect Thursday, citing improved cooperation from shippers.
- Union Pacific says the number of trains held for crew shortages declined from 51 per day in mid-April to 16 per day last week, the lowest of the year on signs of improving congestion.
- U.S. regulators extended an emergency hours-of-service waiver for truck drivers by another six weeks, allowing drivers to break with maximum drive-time rules to transport essential goods.
- More U.S. retailers are beginning to turn their supply chains into dual-purpose logistics services, echoing a strategy championed by Amazon to offer third-party fulfillment alongside delivering its own products.
- Amazon’s newest service will let third-party sellers store bulk inventory at its warehouses, a move coming as the firm dials back facility expansion to rein in costs.
- U.S. nut exporters are looking for new trade routes amid persistent backlogs at the Port of Oakland.
- A group of U.S. soybean exporters are banding together to help fund construction of an exclusive export terminal at the Port of Grays Harbor in Washington state.
- The world’s largest electronics market in China’s Huaqiangbei subdistrict remains shut due to expanding COVID-19 curbs in Shenzhen.
- Shares of U.S. computer chip maker Nvidia plummeted 11% Thursday after the firm and Advanced Micro Devices said U.S. officials told them to stop exporting cutting-edge processors for artificial intelligence to China.
- Broadcom says fourth quarter results will top estimates as the computer chip maker expects resilient demand from businesses turning their operations digital.
- More U.S. farm equipment dealers are going out of business, leaving a handful of manufacturers with control of a large swathe of the market and greater ability to set prices.
- Novelis Inc., one of the world’s biggest buyers of aluminum, said it won’t accept Russian metal in new deals to supply its European factories next year.
- Cold-storage REIT Lineage Logistics expanded its temperature-controlled supply chain in Europe with this week’s acquisition of Grupo Fuentes.
- Boeing now expects certification for its 737 MAX 7 in late 2022 and its 737 MAX 10 in the first half of 2023, according to reports. The schedule will likely require a deadline exemption from U.S. lawmakers.
- Boeing expects to see more orders from Indian airlines as they boost their capacity to keep pace with demand in the world’s fastest-growing aviation market.
- In the latest news from the auto industry:
- Stocks of Chinese electric vehicle makers Nio, Li Auto and Xpeng tanked Thursday after the latter two reported a sharp fall in August deliveries.
- Volvo will temporarily close its plant in the Chinese city of Chengdu due to new COVID-19 restrictions.
- Volkswagen plans a sharp boost in its electric vehicle (EV) production as part of a plan to overtake Tesla in EV deliveries by 2025.
- A German industry group expects passenger car deliveries in the U.S. to drop 7% this year due to supply issues and worsening inflation.
- Unionized Volkswagen workers in Mexico rejected a contract offer Thursday, setting the stage for a strike starting Sept. 9.
- Electric vehicle maker Polestar saw quarterly revenue double in the first half of the year while warning it may have to keep raising prices to offset rising material costs.
- Hyundai and Kia — whose electric vehicle sales surged past rival automakers this year — stand to lose the most from the U.S.’s updated rules that require vehicles to be built in North America to qualify for thousands in consumer tax rebates.
- Skyrocketing British energy prices are making it more economical to fuel gas-powered cars than recharge electric vehicles at charging stations.
- U.S. miners and automakers are lobbying the federal government to cut permit times for new mines in a bid to boost domestic production of electric vehicle minerals.
- Bridgestone will spend $550 million to expand a Tennessee plant to help meet growing demand in the trucking industry for “smart” tires, which are equipped with digital tags that can monitor tire conditions in real time.
- Amazon began rolling out next-generation artificial intelligence in its delivery vans this week, a bid to optimize shipment routes and reduce miles driven.
Domestic Markets
- The U.S. reported 85,761 new COVID-19 infections and 403 virus fatalities Thursday.
- U.S. health officials expect to see another COVID-19 surge this fall as immunity from vaccination wears off and people head indoors when the weather turns colder.
- The CDC gave final approval to the first updated COVID-19 booster doses since the beginning of the pandemic Thursday. The new shots will target the fast-spreading BA.5 subvariant of Omicron ahead of a possible virus surge this winter and could be ready for shipment within days.
- Education officials say disruption stemming from the pandemic has set U.S. students back 20 years in reading and math levels.
- The U.S. unemployment rate inched higher to 3.7% and employers added 315,000 jobs in August in a positive government jobs report that sent stock futures higher in pre-market trading.
- U.S. worker productivity plunged 4.1% in the second quarter, the largest year-over-year decline on record as labor costs continue to rise and firms grapple with rampant inexperience due to a shortage of qualified workers.
- An index of U.S. factory activity was unchanged at 52.8 in August, still the lowest reading since June 2020, according to the Institute for Supply Management.
- Travel disruption is likely to surge in the U.S. this Labor Day weekend as early data point to a 22% increase in consumer spending on air travel, cars, cruises, hotels and tours, according to AAA.
- Americans are beginning to tip less as soaring inflation affects spending habits.
- U.S. construction spending fell 0.4% in July, adding to June’s decline, as rising mortgage rates cooled demand for homebuilding.
- U.S. mortgage rates climbed for a second week to an average of 5.66%, the highest in two months.
- U.S. retailers from Gap to Kohl’s are warning of slumping profit margins as inflation-weary customers hold off on discretionary purchases.
- Farming production costs will rise by an estimated 18% this year as material and labor costs skyrocket.
- Between April and July, 170 U.S. startups and tech firms laid off employees compared to just 20 in the first quarter.
International Markets
- The southern Chinese tech hub of Shenzhen tightened curbs Thursday as COVID-19 infections continue to mount. The southwestern metropolis of Chengdu also launched a four-day lockdown so that it can test its 21.2 million residents for the virus.
- Hong Kong reported 10,586 new COVID-19 cases Thursday, leading to fears of tightened restrictions.
- EU regulators approved Omicron-tailored updates to existing COVID-19 vaccines Thursday, paving the way for countries to start giving shots next week.
- Canada authorized Moderna’s Omicron-tailored COVID-19 vaccine booster Thursday.
- China’s manufacturing activity fell for the first time in three months in August, tipping slightly into contraction territory on power shortages and a spate of COVID-19 restrictions.
- Manufacturing activity across the euro zone fell steeper into contraction territory in August, raising fears that the bloc is in recession.
- Canadian manufacturing activity contracted in August for the first time since the early pandemic on a sharp decline in output and new orders.
- Mexico’s manufacturing sector contracted for a second month in August on weak demand and input shortages.
- Japan’s yen fell to a 24-year low against the U.S. dollar this week on signs that policymakers will break course with other central banks and continue monetary easing.
- South Korea’s main inflation rate dropped to 5.7% in August for the first monthly decline this year.
- Brazil posted an above-expected trade surplus of $4.17 billion in August as both exports and imports rose.
- Argentina’s central bank could hike its benchmark interest rate, currently 69.5%, to 75% this month in a bid to tame one of the world’s highest inflation rates.
- Remittances to Mexico from family members working abroad reached a record-high $5.3 billion in July, up 16.5% from a year ago on the back of a strong labor market in the U.S.
- British housing prices rose for a 13th month in August but slowed from previous months, suggesting a cooling market.
- Toronto home prices have plummeted 16% since March, the largest decline in data going back to 2005.
- Nearly 70 Chinese cities reported declines in new home prices in August as the nation’s worsening property crisis ripples through the its economy.
- Britain’s competition watchdogs have flagged Microsoft’s proposed $69 billion acquisition of “Call of Duty” maker Activision Blizzard, saying the deal would give too much control over consoles and cloud gaming to Microsoft.
Some sources linked are subscription services.