MH Daily Bulletin: September 15

September 15, 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 today at 4 pm? To RSVP for our reception, 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 1% Wednesday after the IEA predicted a rise in gas-to-oil switching for heating purposes this winter.
  • Energy futures slid today following an announcement that a nationwide rail strike was averted. In mid-morning trading, WTI futures were down 3.0% at $85.80/bbl, Brent was off 3.1% at $93.26/bbl, and U.S. natural gas was down 7.5% at $8.43/MMBtu.
  • U.S. crude stocks rose by 2.4 million barrels last week, the second weekly gain in a row fueled by a release from government reserves. Releases are set to end in October.
United States Crude Oil Stocks Change
  • U.S. distillate stocks are about 23% below the five-year average for this time of year, government data shows.
  • Global oil production rose by 790,000 bpd in August, led by increases from Saudi Arabia and the UAE. The IEA says global oil demand will falter in the fourth quarter before rebounding strongly next year. 
  • Rental costs for offshore oil and gas platforms have more than doubled the past two years and could soon rise to $500,000 a day, executives say.
  • U.S. natural gas consumption is poised to hit 86.6 billion cubic feet per day next year, an all-time high:
EIA forecasts record U.S. natural gas consumption in 2022
  • More oil news related to the war in Europe:
    • On Wednesday, the EU’s executive arm unveiled plans to levy $140 billion from energy firm profits to help shield households and businesses from soaring prices. Policymakers also proposed a mandatory target for countries to cut electricity use by 5% during peak hours, while backing away from a Russian gas price cap.
    • European gas prices are down 40% in recent weeks as fuel storage levels look healthy heading into winter.
    • European businesses have ratcheted down gas use in recent months, with slowing production at chemical plants and closed metals factories now widely expected to tip Europe into a recession.
    • Russia’s invasion knocked out 90% of wind power capacity in Ukraine, Europe’s fastest-growing country for wind development.
    • France plans to spend $16 billion on capping power price hikes to just 15% next year, a measure partially funded by windfall profits on non-gas producers.
    • Japan plans to return seven nuclear reactors to service by the summer of next year amid a shortage of natural gas.
  • The U.S. administration awarded $190 million of offshore oil-and-gas leases Wednesday, completing the sale of 1.7 million acres in the Gulf of Mexico that had been held up since last November over environmental concerns.
  • Vehicle electrification will not kill the ethanol market, according to oil executives, as demand will continue to exist in countries where electric vehicle adoption is slower, such as Brazil and India.

Supply Chain

Domestic Markets

  • The U.S. reported 60,558 new COVID-19 infections and 350 virus fatalities Wednesday. Cases, hospitalizations and deaths all fell 6%-8% last week. 
  • New York City is short 176,000 from pre-pandemic employment levels, the slowest recovery of any major U.S. metro area.
  • Pfizer is in late-stage testing of a flu vaccine developed using the mRNA technology of its COVID-19 shots, the first flu vaccine of its kind.
  • The number of Americans working remotely more than tripled in 2021 from pre-pandemic levels to roughly 17.9% of the workforce, or 27.6 million employees, according to federal data.
  • First-time jobless claims fell by 5,000 last week to 213,000, a hopeful sign that an economic soft landing may be achievable. 
  • Retail sales rose 0.3% last month, better than flat sales expected by economists. 
  • The majority of U.S. adults now say that inflation is causing financial hardship in the household, with 12% saying the damage is severe:
Inflation Causing Hardship for Majority of U.S. Households
  • U.S. producer prices fell 0.1% from July to August, the second monthly decline led by lower fuel costs. Prices are still about 8.7% higher than a year ago:
United States Producer Price Inflation MoM
  • More of Americans’ income will be taxed at lower rates next year thanks to a significant inflation adjustment, tax professionals say.
  • The average U.S. mortgage rate topped 6% for the first time since 2008 and is now more than double the level of a year ago. Mortgage demand has fallen by nearly one-third since last year.
  • Self-checkout technology proliferated during the pandemic as retailers faced severe understaffing. Some chains, including Walmart and Dollar General, are piloting stores that offer only self-checkout lanes.
  • Walmart is diving into financial tech as it pilots a new digital checking account program for its 1.6 million employees and some online customers.
  • Amazon faces its third unionization vote this year, this time at a warehouse in upstate New York.
  • California sued Amazon Wednesday, alleging the e-commerce giant violated antitrust law by blocking third-party sellers from selling at lower prices on competing channels to market.
  • Comcast and Johnson & Johnson unveiled buybacks worth billions of dollars Wednesday as they joined a rush of U.S. companies seeking to avoid a new tax on such repurchases.
  • Chinese investment in U.S. venture-capital funds is on pace to reach about $880 million this year, the second-highest level in at least a dozen years.
  • The U.S. administration tripled its planned spending to $3 billion to cut emissions from farming and forestry, the source of nearly 10% of U.S. emissions.
  • The founder of outdoor apparel-maker Patagonia gifted the company to a non-profit trust dedicated to fighting climate change.

International Markets

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