MH Daily Bulletin: February 24

News relevant to the plastics industry:

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Supply

• Oil rose 2% Thursday on expectations of steep cuts to Russian production next month.
• In mid-morning trading today, WTI futures were up 0.1% at $75.49/bbl, Brent was up 0.2% at $82.37/bbl, and U.S. natural gas was up 3.9% at $2.40/MMBtu.
• The Energy Information Agency confirmed that U.S. crude stocks rose by 7.6 million barrels last week, putting inventories above their five-year average.
• After a record-setting year of profitability in 2022, shale producers are battling steep cost inflation, which has driven Devon Energy’s breakeven price to $40/bbl, up from $30/bbl a year ago.
• The CEO of Pioneer Natural Resources expects oil to rise as high as $100/bbl later this year.
• The war in Ukraine has redrawn global trade routes, with a host of trading companies stepping in to move Russian oil to global markets despite Western sanctions.
• Russia plans to cut oil exports from its western ports by up to 25% in March, more than previously announced, in a bid to lift prices.
• Europe will need increased volumes of LNG this year to maintain full storage supplies, analysts say.
• Uzbekistan is falling behind on long-term plans to raise gas output.
• Germany will ban gas and oil heating in new or renovated buildings starting next year as part of efforts to meet climate targets.
• A group of carbon-removal companies has formed a coalition to lobby the U.S. federal government on carbon capture policies.
• After reporting a fourth-quarter loss, BASF said it will cut 2,600 jobs in Europe, mostly in Germany, and suspend share buybacks.

Supply Chain

• Containers waited an average of 4.3 days to move by rail from the ports of Los Angeles and Long Beach in January, the shortest wait time in a year.
• Labor talks covering more than 22,000 workers at U.S. seaports on the West Coast are ongoing, officials said jointly this week.
• Container throughput at Germany’s Port of Hamburg fell just over 5% last year.
• Boeing halted deliveries of 787 Dreamliners due to a documentation issue, the FAA said.
• Cosco Shipping opened a new sea and air logistics center in Guangzhou, China.
• U.S. freight brokers have laid off over 1,000 staffers this year as they adjust to a softening market.
• The U.S. Commerce Department said it will create two semiconductor manufacturing clusters by 2030. 
• Taiwan’s TSMC plans to build its second chipmaking plant in Japan, with total investment expected to be more than $7.4 billion.
• In the latest news from the auto industry:
  • Lordstown Motors will temporarily stop production and deliveries of its electric pickup truck due to performance and quality issues.
  • Shares of electric-vehicle-maker Lucid plummeted Thursday amid weak production forecasts for 2023.
  • Ports in the U.S. Southeast and Gulf Coast expect a boost in cargoes as electric-vehicle manufacturing expands in the region.
  • Carvana’s acquisition of used-car auction business Adesa weighed heavily on its quarterly results.
  • Lithium prices in China slumped by almost one-third over the past three months due to weak demand.
  • French car parts-maker Valeo forecast strong sales growth this year on rising demand for electrification and driving assistance technology.

Domestic Markets

• The personal consumption price index, closely watched by the Federal Reserve, was up a higher-than-expected 0.6% this month.
• Consumer spending surged 1.8% in January, the most in two years.
• The U.S. economy is exhibiting strength early this year after posting solid but weakening growth at the end of 2022.
• After falling 2.7% in December, costs for construction materials jumped over 1% in January and were up 4.9% year over year.
• Mortgage rates rose for a third straight week, hitting 6.5%, the highest level since November.
• Total U.S. home values fell 4.9% in the second half of 2022, the steepest drop in over a decade.
• Online travel agency Booking Holdings set a record in January for monthly bookings.
• Domino’s Pizza missed quarterly sales estimates after hiking delivery and menu prices the past year.
• Dollar General forecast full-year profit well below expectations after being forced to offer deep markdowns to clear excess inventory.
• Moderna forecast declining COVID-19 vaccine sales and higher costs for 2023, raising concerns of a potential full-year loss.

International Markets

• Today marks the one-year anniversary of the Ukrainian war, which has reshaped global markets.
• Despite stiff sanctions and an exodus of Western businesses, Western goods are still crossing the Russian border.

• Euro zone inflation eased to 8.6% in January from 9.2% a month earlier.
• Japan’s consumer inflation hit a 41-year high of 4.3% in January

• Japan’s central bank intends to maintain easy monetary policy to hold down inflation, officials say.
• Mexico’s headline inflation fell to 7.76% in early February, a steeper drop than expected.
• A slowdown in grain exports from Ukraine is threatening to raise global bread prices.
• Alibaba Group Holding reported better-than-expected quarterly revenue Thursday, helped by China’s easing of COVID-19 curbs.
• High ticket prices are not dissuading travelers from the air, as international airlines report bumper profits after suffering big losses during the pandemic.
• Flights to and from Amsterdam’s Schiphol airport will be limited to 460,000 per year, a bid to cut down on noise and environmental pollution.
• Belgium set new flight limits for Liege Airport, primarily a cargo airfield, due to environmental concerns.

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