MH Daily Bulletin: February 3

News relevant to the plastics industry:

At M. Holland

• M. Holland will be exhibiting at MD&M West in Anaheim on Feb. 7-9. Stop by Booth #4115 to meet our Healthcare team and discuss how M. Holland’s line of medical-grade resins can help you develop safe and effective medical products and packaging.

Supply

• Oil fell less than 1% Thursday on news that U.S. factory orders fell last month, signaling a slowing economy.
• In mid-morning trading today, WTI futures were up 2.0% at $77.39/bbl, Brent was up 1.7% at $83.60/bbl, and U.S. natural gas was down 3.5% at $2.37/MMBtu.
• U.S. oil refiners are dialing back operating capacity this quarter to between 85%-89%, a bid to keep profit margins high during one of the weakest demand periods of the year.
• Jet fuel prices are up an average of 20% since Dec. 7, including a 77% surge on the U.S. East Coast, on swelling demand from a global rebound in travel.
• ConocoPhillips saw profit more than double to $18.7 billion in 2022, joining a parade of bumper earnings from major Western producers.
• Crude oil imports into Asia hit an all-time high in January, rising by 11% despite lower arrivals into China.
• More news related to the war in Ukraine:
  • Analysts say the EU’s Feb. 5 ban on imports of Russian refined oil products, including diesel and jet fuel, will hurt Moscow more than the existing embargo on crude oil.
  • Construction holdups at several key Middle Eastern refineries could hamper Europe’s ability to quickly replace Russian fuel imports, set to be embargoed Feb. 5.
  • Spain’s LNG exports to Europe soared last year as it built out its port capabilities.
  • Germany is expected to become a net power importer within years as it phases out nuclear and coal-fired power plants.
  • Oil-rich Norway is set to tap its $1.3 trillion sovereign wealth fund to pay for long-term aid to Ukraine, officials said.
• The quarterly loss for wind turbine-maker Siemens Gamesa, soon to be folded into parent Siemens Energy, more than doubled on higher warranty provisions attached to faulty components.

Supply Chain

• Hundreds of thousands of Texans were without power Thursday on lingering impacts from storms this week. The U.S. Northeast is expected to be hit next over the weekend.
• U.S. industrial construction starts fell 24% last quarter compared to a year earlier, signaling a prolonged shortfall in logistics space.
• Canadian Pacific Railway’s fourth-quarter profit more than doubled on a 21% increase in revenue.
• Old Dominion Freight Line carried an average of 48,798 less-than-truckload shipments per day in the fourth quarter, down 8.6% from a year earlier.
• Hapag-Lloyd’s fourth-quarter operating profit fell about 21% to $3.3 billion.
• The pace of companies moving production and equipment to Mexico is putting a premium on logistics capabilities along the border with the U.S.
• Container throughput at China’s ports increased 4.7% last year, including 0.6% growth at the Port of Shanghai.
• U.S. officials and industry executives met with Indian policy makers as part of an effort to shift critical technology supply chains away from China.
• The orderbook for new container ships has grown to more than 900 vessels.
• In the latest news from the auto industry:
  • Ford posted a lower-than-expected $1.3 billion quarterly profit as supply disruptions outweighed strong pricing and better inventory levels at dealerships. Sales of the automaker’s electric models doubled.
  • Volkswagen’s Skoda Auto will further cut production next week due to component shortages.
  • Harley-Davidson shares rose almost 10% Thursday after earnings beat forecasts for the seventh quarter in a row.
  • Ferrari saw earnings rise 16% last year on a nearly 20% jump in deliveries.
  • Honda plans to launch a hydrogen-powered SUV by the end of 2023.
• Global e-commerce sales, excluding travel, probably exceeded $1 trillion for the first time last year, according to Comscore.
• Amazon’s initial drone services in California and Texas have completed few deliveries because of regulatory constraints.
• CMA CGM ordered 12 methanol-powered container ships from South Korean shipyard Hyundai Samho.

Domestic Markets

• Employment growth surged in January, with employers adding 517,000 jobs, nearly triple economist estimates, as the unemployment rate fell to 3.4%, the lowest since 1969. 
• Weekly unemployment filings dropped to a nine-month low last week of 183,000, signaling resiliency in the labor market.

• U.S. layoffs hit 102,943 in January, a two-year high, as tech firms cut jobs at the second-fastest pace on record.

• U.S. worker productivity rose at a 3% rate in the fourth quarter, indicating a moderation in the growth of labor costs.
• New orders for U.S.-manufactured goods rebounded in December, up 1.8%.

• U.S. mortgage rates fell this week to an average of 6.09%, the lowest in five months.
• In the latest news from quarterly earnings season:
  • Apple announced its first quarterly revenue decline in nearly four years due to manufacturing disruptions in China.
  • Amazon beat projections with a 9% sales gain to a total of $149.2 billion, but investors are worried by slowing growth in its key e-commerce and cloud computing units.
  • Google parent Alphabet said ad spending fell in the fourth quarter for only the second time in its history as the company reported a modest gain in year-over-year revenue.
  • Starbucks posted record quarterly revenue although higher costs ate into its expected profit.
  • Clorox raised its annual forecast after higher prices led to better-than-expected quarterly revenue and sales growth.
  • Hershey’s saw holiday-quarter revenue rise 14% on steady demand for candy and chocolates despite higher prices.
  • Beauty company Estee Lauder forecast a bigger drop in full-year profit, citing uncertainty around recovery in major market China.
  • Qualcomm’s quarterly revenue dropped 12% from a year ago, including a steep decline in its key unit providing computer chips for handheld devices.
  • Panasonic Holdings cut its annual operating profit forecast by 12.5%, citing headwinds from slowing demand and high raw material prices.
  • Sony Group nudged up its annual profit forecast on strong quarterly results for its video-game division.
  • Medical device-maker Siemens Healthineers saw a drop in quarterly profit driven by low demand in China.
  • Farming machinery-maker CNH Industrial saw better-than-expected earnings but warned that soaring growth in industrial agriculture markets will likely slow by 2024.

International Markets

• Economists see at least two more European rate hikes this year after the European Central Bank raised interest rates by 0.5% on Thursday and signaled a hike of similar size for February.

• After the eurozone dodged a technical recession with a 0.1% growth rate in the fourth quarter, its Purchasing Managers’ Index (PMI) rose above 50 in January, the demarcation between expansion and contraction.
• In January, the services PMI in the U.K. fell to its lowest level since January 2021, when the country was on lockdown.
• German exports fell a larger-than-expected 6.3% in December.
• Ryanair flew 11.8 million passengers in January, a record for the month.
• Global crude steel production fell last year for the first time in seven years.
• Coca-Cola and Berry Global are introducing tethered caps for PET soda bottles in EU markets, more than a year before they are mandated.

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