MH Daily Bulletin: September 12

September 12, 2022 • Posted in Daily Bulletin

News relevant to the plastics industry:

At M. Holland

  • M. Holland has announced expanded access to 3D printing filaments from Braskem, a global chemical company, providing clients with access to polyethylene (PE) and glass fiber reinforced polypropylene (PP) filaments. Click here to read the full press release.
  • Are you attending the North American Detroit Auto Show this week? We invite you to join our networking reception at the Detroit Athletic Club on Thursday, Sept. 15 at 4 pm. To RSVP for our reception or set up a meeting with our Automotive team, please contact Mike Gumbko, Strategic Account Manager.
  • Market Expertise: M. Holland offers a host of resources to clients, prospects and suppliers across nine strategic markets.

Supply

  • Oil prices rose about 4% last Friday but ended the week slightly lower for the second week in a row.
  • In mid-morning trading today, WTI futures were up 1.9% at $88.43/bbl, Brent was up 1.8% at $94.51/bbl, and U.S. natural gas was up 3.0% at $8.24/MMBtu.
  • Active U.S. oil and gas rigs fell by one last week to 759, down for the fifth out of the last six weeks. Active oil rigs fell to a two-month low.
  • The U.S. administration walked back comments suggesting it could release more strategic crude reserves beyond the 180 million barrels originally planned.
  • Texas saw a 25% surge in tax revenue for the 2022 fiscal year, led by inflows from the oil and gas industry.
  • Power prices in Europe dipped today on rising output from nuclear and renewable sources. 
  • Defying expectations, global coal-fired power generation declined in the first half of the year, despite the energy crisis. 
  • Almost 24% of U.S. electricity came from renewables in the first half of 2022, up from 21% the same time last year:
In the first half of 2022, 24% of U.S. electricity generation came from renewable sources
  • More oil news related to the war in Europe:
    • Operations at the Russian-held Zaporizhzhia nuclear plant in Ukraine have been fully halted as shelling continues to spark fears of a nuclear disaster.
    • Meeting late last week, EU energy ministers failed to agree on mandates for member nations to reduce energy demand this winter. Countries are now being urged to develop strategies to reduce consumption by at least 10%.
    • The U.S. Treasury Department issued guidance for navigating the expected labyrinth of newly formed companies and abnormal shipping routes that could arise when Russian oil prices are capped by the West.
    • The European Central Bank has refused to give short-term financing to energy firms facing significant margin calls, which could total as high as $1.5 trillion following wild swings in power and gas prices.
    • Natural-gas and electricity prices have jumped by about a quarter since Russia shut down the Nord Stream pipeline to Germany.
    • Germany is considering direct intervention in its energy market to avoid a wave of insolvencies and soaring gas prices, key lawmakers said. 
    • Russian gas giant Gazprom is poised to rake in around $100 billion in revenue this year, some 85% higher than 2021.
    • German energy providers are signing more long-term LNG contracts to avoid future shortages, a potential roadblock to meeting the nation’s environmental targets. 
    • Many European companies face an existential threat due to the cutoff of Russian gas, possibly ushering in a permanent restructuring of industry on the continent.
    • Regulatory uncertainty is delaying a number of green hydrogen projects slated for Europe.
  • British Columbia, Canada, is rationing water to the oil and gas industry in response to persistent drought.
  • China’s silicon industry group stopped releasing prices of key solar material polysilicon as rising supply chain costs “shock” the stability of the solar industry, the group said.

Supply Chain

  • U.S. railroad and union negotiators worked through the weekend to secure new contracts for roughly 90,000 unionized workers who have yet to reach agreement. With a September 17 walkout deadline looming, some rail lines are warning of potential service disruptions and a trade group is predicting a strike could cost the economy $2 billion a day.
  • Dutch rail unions reached a deal with employers to boost pay, ending strikes that disrupted service for much of the past several weeks. 
  • Workers at Britain’s port of Liverpool are planning a two-week walkout next Monday, Sept. 19, over a wage dispute.
  • The cost to ship a 40-foot container from China to the U.S. West Coast has fallen 60% since January to about $5,400 a box, according to the Freightos Baltic Index. Asia-to-Europe rates are down some 42% over the same period. 
  • Earnings for computer-chip related companies in the S&P 500 are projected to be flat in 2023, down from expectations of 12% growth just three months ago.
  • Online sales are poised to rise 9.4% this year to $1 trillion, the first time growth has slipped into the single digits as inflation-weary consumers curb their spending.
  • With California’s electricity usage poised to rise 18% by 2030, analysts question how the state’s power grid — already reeling from the strains of high temperatures — will keep up. 
  • India pushed back bidding in the privatization of the Shipping Corporation of India until the first quarter of 2023
  • A New York shipper is seeking $180 million from Maersk in a complaint alleging the carrier rejected contracted loads in favor of spot-market customers.
  • In the latest news from the auto industry:
EV Market Revenue Set To Hit $384 Billion in 2022

Domestic Markets

International Markets

Most Central Banks Raised Interest Rates in 2022
  • Money managers yanked $3.4 billion from European stock funds last week, taking total outflows in the past six months to $83 billion as the continent’s energy crisis makes investors wary.
  • Ukraine’s inflation rate spiked by 23.8% in August, its seventh rise in a row.
  • Canada’s jobless rate unexpectedly jumped for a third month in August, a potential sign that interest-rate hikes have started to cool the tight labor market.
  • Economists believe Argentina’s yearly inflation rate will top 95%, as the country struggles to overcome a prolonged economic crisis.
  • The International Monetary Fund is stepping up bailout efforts for financially distressed developing nations, helping to avert a potential default crisis.

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