MH Daily Bulletin: June 8

News relevant to the plastics industry:

At M. Holland

• M. Holland is exhibiting during the WAI Operations Summit & Wire Expo on June 7-8 in Dallas, Texas. This event focused on wire and cable manufacturing offers industry forecasts, technical presentations, networking and more. Join us at Booth #621 to learn more about our supply solutions for wire and cable. 

Supply

• Oil prices rose about 1% Tuesday, with WTI settling at a 13-week high of $119.41/bbl. 
• In mid-morning trading today, WTI futures were up 1.4% at $121.00/bbl, Brent was up 1.5% at $122.30/bbl, and U.S. natural gas was up 3.2% at $9.59/MMBtu. 
• The American Petroleum Institute reported a surprise build of 1.845 million crude barrels last week, while government data will be released today. 
• Goldman Sachs raised its short-term target for Brent crude from $125/bbl to $140/bbl, while trading giant Trafigura sees oil headed to $150/bbl this year. 
• A major equipment failure risks shutting LyondellBassell’s 268,000-bpd Houston oil refinery quicker than its planned closure at the end of 2023, potentially eliminating a vital source of U.S. supply. 
• The average U.S. gasoline price hit a record $4.92 a gallon Monday, up 30 cents over the past week. Prices in 13 states are above $5 a gallon. 
• British gasoline and diesel prices are surging to record highs.
• Over 10% of Norwegian offshore oil and gas workers plan to strike starting Sunday if state-brokered wage talks fail. 
• Qatar will partner with Exxon Mobil, Total Energies, Shell and ConocoPhillips to expand the world’s largest LNG project and boost its annual output 64% by 2027. 
• More oil news related to the war in Europe:
  • The U.S. sent nearly 75% of its LNG output to Europe in the first four months of the year, up from a third last year. 

• A government-controlled bank in Japan suspended its support for a $21 billion LNG facility under construction in Siberia, casting further doubt about the project after TotalEnergies wrote off its investment in April.  
• European natural gas prices are on a five-day retreat due to an early start to summer and rising LNG storage levels. 
• Russia aims to ramp up oil exports from its major eastern port of Kozmino by about 20% amid higher demand from Asian buyers. 
• Future Western sanctions could include limiting Moscow’s revenue from oil exports. 

• The White House is reviewing the environmental impact of what would be Maryland’s first offshore wind energy project. 
• Shell launched a new green power business in Texas offering perks including free charging for electric vehicles and credit for excess household solar generation. 
• Spain’s Repsol is in talks to sell 25% of its exploration and production business to help fund clean energy efforts. 
• India eased rules to allow commercial and industrial consumers to switch to green sources of electricity, a bid to quicken its energy transition. 

Supply Chain

• The average U.S. diesel price jumped to $5.70 a gallon Tuesday, a record. 
• Texas grid operators say the state’s grid is holding up well against record power demand this week. 
• U.S. economic expansion will push up power demand to new records this year and next, according to the Energy Information Administration. 
• Japan called on households and companies to conserve electricity this summer to prevent supply-induced blackouts. 
• California residents dismissed dire calls for water conservation in April, with the southern part of the state increasing its usage by more than 25% despite worsening drought. 
• Britain’s entire train network could shut down for three days this month if more than 50,000 workers follow through with plans for a walk-out over job cuts and pay. 
• Drewry says spot container rates from China to the U.S. West Coast are down 41% month over month to $9,630, while imports bound for the U.S. have dropped sharply since late May.  
• Transatlantic airfreight capacity is improving alongside the sharp rebound in air passenger demand. 
• Old Dominion Freight Line’s per-day revenue increased 26% in May from a year ago, following a 29.1% increase in April. 
• Maersk became the first foreign carrier to move international shipping containers between ports in China. 
• CMA CGM took delivery of two Boeing cargo planes a week after its air freight unit became a certified French airline, as the shipper continues to expand beyond ocean freight.
• U.S. shippers are coping with a deepening shortage of truck trailers at a time when Class 8 truck and tractor orders slipped to a six-month low in May due to supply shortages. 
• Detroit-based Fruehauf is restarting trailer production for the first time in 25 years at a new $15 million plant in Kentucky. 
• Competing logistics crises are hampering White House goals to kickstart the U.S. solar supply chain through the use of emergency funding. Industry experts say about two-thirds of U.S. solar projects planned for this year are at risk of being delayed or canceled. 
• Union Pacific expects to miss its full-year financial targets as rising fuel and network costs weigh on margins. 
• Thousands of union truck drivers began striking in South Korea Tuesday over wages. 
• Uber Freight is partnering with Google parent Alphabet to develop a connected service and brokerage system for autonomous freight trucking. 
• A South Korean firm claims to have completed the world’s first autonomous trip of a commercial vessel across the Pacific. 
• Autonomous trucker Gatik will start delivering Georgia-Pacific’s paper goods to several dozen Sam’s Club outlets in Texas this summer. 
• Schneider National plans to acquire the assets of Wisconsin-based dedicated truckload carrier deBoer Transportation. 
• The closure of a GE plant in Shanghai continues to impact hospital supplies of critical imaging materials.
• Contract manufacturer Foxconn raised its quarterly and annual outlook on improving supply-chain stability in China. 
• Taiwan Semiconductor Manufacturing Co. expects revenue to grow about 30% this year amid resilient global demand for electronics. 
• Ocean Network Express ordered 10 mid-sized container ships to be powered by ammonia and methanol. 
• Swedish tanker owner Stena cut its quarterly loss by about a quarter to $76 million. 
• Dubai is selling a minority stake in its flagship port and two nearby business parks to a Canadian pension fund, a bid to cut the debt of the facilities. 
• France will remove bird flu-related restrictions on poultry farming after recent outbreaks forced 16 million birds to be culled.  

Domestic Markets

• The U.S. reported 121,658 new COVID-19 infections and 469 virus fatalities Tuesday. 
• Two more highly contagious subvariants of Omicron — dubbed BA.4 and BA.5 – now make up 5% and 8% respectively of U.S. COVID-19 cases. 
• The FDA endorsed Novavax’s COVID-19 vaccine Tuesday, setting the stage for full authorization of the nation’s fourth vaccine. 
• Moderna announced that its redesigned COVID-19 booster delivered improved protection against Omicron in tests.  
• The CDC raised its travel alert for Monkeypox to a level 2, recommending people practice “enhanced precautions” after thousands of cases appeared worldwide. 
• The U.S. Treasury Secretary said last year’s prediction of “transitory” inflation was an error and that the government will likely revise upward its inflation forecast in the weeks ahead.  
• The U.S. trade deficit dropped 19.1% in April to $87.1 billion, down from March’s all-time high on a sharp decline in imports. 

• U.S. consumer borrowing surged 10.1% on an annualized basis to $38.1 billion in April following a record jump a month earlier, fueled by rising prices and the continued strength of the economy. 

• Companies are hanging onto LIBOR-based contracts despite a regulatory push away from the discredited interest-rate benchmark, which is set to expire next summer. 
• Macroeconomic pressures on firms, such as staffing shortages and supply chain delays, have likely contributed to deteriorating customer service across most industries. 
• Regional airports and airlines are losing flights as big airlines lure the scarce supply of pilots. 
• The typical premium on homes in risky fire areas has surged during the pandemic as more Americans move out of big cities. 
• U.S. hotel prices are up 33% the past year, with the largest rises in Miami and Long Island. 
• Inflation is making it 22.4% more expensive for Americans to take care of their lawns, according to online home-services firm Angi. 
• Peloton is replacing its finance chief as the firm deals with waning demand after facing production and delivery issues. 
• Taco Bell is pioneering a revamped drive-thru experience with four lanes, digital check-in screens, video technology and a vertical lift for transporting menu items. 
• Polestar, a Swedish maker of electric performance vehicles, will introduce its first car to the U.S. market this October. 

International Markets

• The World Health Organisation’s top official said a global pact to waive intellectual property rights for vaccines could be reached by next week. 
• A European study found babies exposed to COVID-19 in the womb had a higher risk of neurodevelopmental changes. 
• More news related to the war in Europe:
  • The U.S. Treasury Department banned U.S. investors from purchasing Russian debt. 
  • Russian state flagship airline Aeroflot plans to raise up to $3 billion to stay afloat amid punishing Western sanctions. 
  • Microsoft will suspend new sales of products and services in Russia as it substantially scales down its operations. 
  • Advertising giant Publicis Groupe lowered its global ad-spending forecast for 2022, citing Russia’s invasion.
• The World Bank cut its forecast for global economic growth this year to 2.9% from an earlier 4.1%, warning that several years of high inflation and below-average growth lie ahead. The Organisation for Economic Cooperation and Development made a similar revision to its forecast. 
• Canadian exports rose just 0.6% in April after planned maintenance slowed production from its profitable oil sands. 
• India’s central bank hiked its interest rate by 50 basis points to 4.9% yesterday, the second increase in two months. 
• Chile’s central bank lifted its interest rate by 75 basis points yesterday to 9%, a two-decade high. 
• Roughly 13% of British mortgage borrowers could go into financial distress if high inflation keeps pace next year, economists warn.  
• Switzerland’s Credit Suisse Group warned its capital position is eroding as companies opt not to sell new stock or bonds amid volatile conditions, wiping out a main source of revenue. The declines could lead to a second-quarter loss and potential layoffs. 
• Scandinavian Airlines is facing liquidity problems after the Swedish government rejected its request for almost $1 billion in needed restructuring dollars. 
• Ryanair saw 15.4 million passengers in May, an all-time high. 
• Cazoo, a British online used-car platform, will cut its workforce by 15% as economic headwinds lead the firm to abandon growth plans. 
• A day after announcing it would hire over 4,000 new tech workers, Citigroup said it plans to add 3,000 workers for its Asia institutional business. 

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