MH Daily Bulletin: February 13

News relevant to the plastics industry:

At M. Holland

• Last week, Plastics News featured business insight from M. Holland’s market experts, including predictions for 2023. Read the full Plastics News article here.

Supply

• Oil rose 2% Friday and posted weekly gains of more than 8% after Russia announced plans to reduce oil production by 500,000 bpd next month.
• Some analysts suggest Russia’s threatened 500,000 bpd production cut is as much a result of waning demand for Russian crude as a retaliatory move over Western sanctions. 
• In mid-morning trading today, WTI futures were down 0.8% at $79.09/bbl, Brent was down 0.8% at $85.19/bbl, and U.S. natural gas was down 2.0% at $2.46/MMBtu.
• U.S. gasoline prices rose 1.7% last week and were 3.7% above the four-week average. 
• Active U.S. drilling rigs rose by two last week to a total of 761, with gas rigs falling by eight and oil rigs increasing by 10.  
• More OPEC officials expect oil to return to $100/bbl this year, according to reports. The coalition also signaled it would not boost production to make up for Russia’s latest output cuts.
• Costs to ship gasoline and other fuels have skyrocketed since Europe banned imports of Russian oil products Feb. 5.
• Kazakhstan delayed starting a major oil pipeline due to complications at an earthquake-damaged port in Turkey.
• Canada’s pipeline operator Enbridge reported a loss for the fourth quarter due to a goodwill impairment charge, compared with a quarterly profit last year.
• Chevron agreed to sell its assets in Myanmar, a decision coming about a year after the country’s military coup sent companies packing.
• Global consumer energy bills could rise 75% above their five-year average in 2023 even if costs moderate, the World Bank said.
• ExxonMobil has retreated from a highly publicized, decade-old effort to make biofuels from algae.
• EU leaders reached early agreement to provide targeted support to the green energy industry in response to the U.S. Inflation Reduction Act.
• Major companies are battling to define “green” energy as they seek a greater share of new U.S. incentives for clean-energy development, especially hydrogen.
• An international team of scientists claims to have succeeded in splitting green hydrogen from seawater, a potentially endless supply of energy. 

Supply Chain

• U.S. diesel prices are on a sharp downswing, despite Europe’s ban on imports of Russian oil products this month.
• A union of more than 40,000 rail workers in Britain rejected another set of pay offers and threatened to stage labor actions “for as long as it takes.”
• Thousands of staff at Heathrow Airport will vote whether to strike this week, adding to a wave of industrial disruption on the U.K.’s transport networks.
• The Port of Savannah plans to expand its chilled and frozen warehouse space by 11% this year.
• The value of land earmarked for warehouse development in the U.K. collapsed last year, new figures show.
• Metals prices are surging back to 2022 highs, lifted by China’s pandemic reopening and low global supplies.
• Top executives from multinational companies such as Volkswagen, Apple and Pfizer are gradually returning to China for business opportunities despite growing U.S.-China tensions.
• Intel is reportedly considering boosting investments in a chip packaging plant in Vietnam as it seeks to expand its footprint in Asia.
• North American companies, primarily in the U.S., ordered more than 44,000 industrial robots last year, an 11% increase over the previous year and a new record.
• Walmart is warning major packaged-goods makers that it can no longer pass on their price hikes to consumers.
• Consumer product companies are increasingly turning to wholesalers to offload stubbornly high inventories.
• Less-than-truckload carrier Yellow saw tonnage sink 25% year over year in the fourth quarter as it posted a loss.
• In the latest news from the auto industry:
  • LG Chem is considering investing in mining firms to aid in building a global supply chain for electric-vehicle batteries.
  • Large, high-pressure die-casting machines, called gigapresses, are revolutionizing car manufacturing by minimizing part assembly, reducing costs by up to 40%, and producing lighter and stronger parts.
  • Honda reported a 22% rise in operating profit in the latest quarter, driven by strong sales in Asia and cost reductions.
  • Tesla raised the price of some cars in China after the company’s aggressive price cuts at the start of the year ignited demand.
  • Volkswagen will speed up its shift to electric cars and revamp its software as part of a newly unveiled five-year investment plan.
  • Ford is set to announce a $3.5 billion lithium iron phosphate battery plant in Michigan, to be owned jointly with Chinese battery company CATL.
  • Ford cut its stake in electric-vehicle maker Rivian to about 1% due to the company’s continued production issues.
  • Auto parts maker Magna saw quarterly profit decline by 80% due to higher costs.

Domestic Markets

• U.S. consumer sentiment improved to a 13-month high in February, with the University of Michigan’s index coming in at 66.4.

• The U.S. government posted a $39 billion budget deficit in January after a $119 billion surplus a year earlier, as revenues dipped and one-time costs, including the bailout of a union pension fund, pushed outlays higher.

• U.S. consumer prices were revised to a stronger-than-expected 0.3% gain in December.
• U.S. imports from China rose 6.3% last year to $536.8 billion despite attempts by the federal government to reduce the nation’s reliance on Chinese goods.
• The White House is planning to outright ban investments in some Chinese tech companies and increase scrutiny of others.
• Adidas shares plunged on Friday after the sportswear maker warned it could plunge to a loss this year for the first time in three decades.
• Facebook parent Meta is reportedly planning a new round of job cuts following a cut of more than 11,000 jobs, or 13% of its workforce, in November. 
• U.S. airlines are calling on the FAA to extend the deadline for a 5G upgrade of the country’s air traffic control system currently set for the end of 2023.
• Bed Bath & Beyond announced plans to wind down operations in Canada as the struggling retailer seeks to streamline its business.

International Markets

• U.K. consumer sentiment jumped in January.
• Tensions between the U.S. and China are elevating fears of a possible global recession, analysts say.
• China’s factory gate prices fell more than expected in January, suggesting a more modest impact from the country’s scrapping of COVID-19 restrictions.
• Canada’s economy gained 150,000 jobs in January, including major boosts in services and construction.
• Foreign direct investment in Mexico rose 12% last year to the highest level since 2015. 
• India’s industrial output rose a lower-than-expected 4.3% in December.
• Samsung Electronics said it will use 100% recycled plastic in its smartphone products and eliminate all plastic packaging by 2050.

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