MH Daily Bulletin: September 21

September 21, 2022 • Posted in Daily Bulletin

News relevant to the plastics industry:

At M. Holland

Supply

  • Oil fell 1.5% Tuesday, putting Brent and WTI on track for their worst quarterly percentage drop since the start of the pandemic.
  • In mid-morning trading today, WTI futures were up 0.5% at $84.34/bbl, Brent was up 0.6% at $91.18/bbl, and U.S. natural gas was up 0.2% at $7.74/MMBtu.
  • U.S. crude stocks rose a smaller-than-expected 1.035 million barrels last week, according to the American Petroleum Institute. Government data is due today.
  • A major fire shut down a BP-operated refinery in Toledo, Ohio, yesterday. 
  • Officials in Monterey County, California, advised residents to shelter in place after a Tesla Megapack, a large industrial battery system, caught fire, spewing toxic smoke and forcing road closures. 
  • Benchmark Canadian heavy oil prices will likely rise soon as U.S. refiners return to the market when releases from U.S. reserves end.
  • Texas added a robust 2,600 new oil and gas jobs in the upstream sector last month, building on over 44,000 job gains the past two years.
  • Haiti is seeing massive social unrest after the government moved to raise fuel prices Tuesday.
  • The spread between natural gas prices from the Waha Hub in West Texas — near the prolific Permian Basin — and Louisiana’s benchmark Henry Hub price has widened this year due to pipeline maintenance constraints in the Permian basin and production levels:
The Waha Hub natural gas price continues to fall below the Henry Hub price

Supply Chain

  • Some 80% of Puerto Rican homes and businesses still lack power from the impact of Hurricane Fiona, now bearing down on more Caribbean archipelagos as a Category 3 storm. U.S. officials are calling for an investigation into Puerto Rico’s grid operator as billions of dollars in aid have failed to prevent widespread outages.
  • At least nine people died Tuesday after a warehouse near Brazil’s largest city of Sao Paulo collapsed.
  • With an index of spot container rates down 44% over the past six months, freight liner executives predict a further, gradual decline in rates
  • Revenue at FedEx’s ground unit is currently $300 million below forecasts, in line with the firm’s prediction of a slowdown in e-commerce shipments.
  • The Atlantic has overtaken trans-Pacific trade as the most lucrative market for container lines, according to Alphaliner.
  • Taiwan’s export orders, a bellwether for global tech demand, unexpectedly rose by 2% in August on strong demand for consumer electronics.
  • U.S. retailers’ inventory-to-sales ratio rose from 1.21 in June to 1.23 in July, the highest level since February 2021.
 Retailers: Inventories to Sales Ratio
Electric Vehicle Infrastructure Enters Catch-Up Mode

Domestic Markets

United States Housing Starts
  • Higher rents are emerging as a major driver of overall U.S. inflation, remaining elevated when prices for many other products and services are starting to ease. Rents for single-family homes were up 12.6% in July compared with the year-ago period.
  • Pandemic staffing shortages at U.S. restaurants are easing, industry leaders say.
  • Walgreens Boots Alliance plans to buy the remaining 29% stake it does not already own in specialty pharmacy Shields Health Solutions for $1.37 billion as the firm diversifies beyond standard drugstores.
  • Nordstrom adopted a “poison pill” to prevent outsiders from boosting their stake in the business after a Mexican company acquired a 9.9% stake in the upscale U.S. retailer.
  • Federal antitrust enforcers are giving greater scrutiny to Amazon’s proposal to buy Roomba maker iRobot for $1.7 billion.
  • Gap announced plans to cut 500 corporate jobs Tuesday, just a month after withdrawing its annual performance forecast due to an inventory glut and weak sales.
  • Boeing is cutting 150 finance jobs in the U.S., some of which will be offshored to India.
  • United Airlines was forced to cancel some flights and remove 25 jets from service Monday and Tuesday after realizing it had failed to perform required inspections on them. 

International Markets

  • There were 19.4 million new COVID-19 cases reported the past month, with the largest increases in Japan (+29%), Taiwan (+20%) and Hong Kong (+19%). 
  • Hong Kong will soon end its controversial hotel quarantine policy for arrivals, officials signaled.
  • The Dutch government removed all COVID-19 entry restrictions on travelers this week.
  • Up to 20% of COVID-infected Europeans have long-COVID symptoms, new research shows.
  • Chinese researchers have developed a mask that lets wearers know if they’ve been exposed to COVID-19 or the flu. 
  • Regulators in China and India have approved the first use of COVID-19 vaccines that can be inhaled or taken as a nasal spray
  • Shanghai officials announced $257 billion of new infrastructure projects Tuesday, a bid to kickstart the regional economy after its GDP shrank 13.75% in the second quarter.
  • Canada’s inflation rate came in at a lower-than-expected 7% last month, led by falling gasoline prices. Grocery prices, on the other hand, rose at their fastest pace since 1981.
  • Canadian home prices fell a record 2.4% from July to August in response to fast-rising interest rates.
  • The Asian Development Bank cut its growth forecast for developing Asia to 4.3% this year, slower than its 5.2% prediction from April.
  • Barclays says investment banks will see a revenue shake-up next year as rebounding banking and advisory fees offset a fall in trading income.
  • The chief executive of Amsterdam Airport Schiphol resigned over flight disruptions there.
  • British brewers are facing tenfold price increases for the CO2 used to carbonate and package beers.
  • PepsiCo has stopped making Pepsi, 7UP and Mountain Dew in Russia nearly six months after the U.S. company said it would suspend sales and production there due to Russia’s invasion of Ukraine.

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