MH Daily Bulletin: November 10

News relevant to the plastics industry:

At M. Holland

• M. Holland is hosting a free 3D Printing Technology Forum in Chicago on Nov. 16! Attendees will learn how additive manufacturing technologies can support the development of applications — especially injection molding! Click here to RSVP, or contact 3dinfo@mholland.com for more information. 
• During our recent Plastics Reflections Web Series broadcast, M. Holland’s expert panelists discussed the macroeconomic factors influencing global and domestic markets, including impacts on the plastics industry. Click here to read a recap of the webinar

Supply

• Oil fell 3% Wednesday after industry data showed a rise in U.S. crude stockpiles.
• In mid-morning trading today, WTI futures were up 1.1% at $86.78/bbl, Brent was up 1.2% at $93.80/bbl, and U.S. natural gas was up 4.2% at $6.11/MMBtu.
• U.S. crude stocks rose by a surprise 3.9 million barrels last week, according to the U.S. government.
• Motiva Enterprises’ refinery in Port Arthur, Texas, the nation’s largest, is coming back online after a month of repairs and upgrades.
• An unexplained fire broke out Wednesday at Chevron’s 290,000-bpd refinery in El Segundo, California, a key source of fuel for the southern portion of the state.
• Phillips 66 will cut some 1,100 employees as it looks to shave costs by $500 million this year.
• North American oil and gas pipeline firm TC Energy is looking to sell $3.7 billion of assets to repay debt and fund new projects.
• U.S. natural-gas prices will likely average above $6/MMBtu this winter, down from August records but still the highest price in over a decade:

• Lagging North American grid infrastructure could force utilities to use blackouts on the coldest days this winter, trade groups say.
• More oil news related to the war in Europe:
  • Europe’s diesel stockpiles will fall to decade-lows this spring after sanctions take effect on all Russian fuel deliveries in February. 
  • German officials are considering a retroactive windfall tax on electricity providers, while the Czech Republic has already approved a similar measure.
  • Italy’s Eni plans to double gas production in 2.5 years, as it expands drilling in the Adriatic Sea.
  • India says it will keep buying Russian oil as the two countries look to expand trade ties.
  • The U.S. will lend $3 billion to Romania to build two nuclear plants.
• U.S. oil producer Occidental says the world’s largest carbon-capture project it is building in Texas will cost 22% more than expected due to inflation.
• Spain’s Iberdrola will invest $47 billion in power grids and renewables production over the next two years.
• EU policymakers set a new 40% emissions-reduction target across sectors including agriculture, buildings and transport by 2030.
• Speaking at the United Nations COP27 climate summit, U.S. officials proposed a new Energy Transition Accelerator (ETA) that would enlist investors to put billions into helping developing nations switch from dirty to clean fuels.
• The U.S. and Europe will unveil a joint agreement to cut methane emissions in the fossil-fuel sector this week.
• Members of the Arab Coordination Group, which includes the OPEC Fund for International Development, pledged $24 billion in financing to lower emissions by 2030.

Supply Chain

• Nicole struck the east coast of Florida as a Category 1 hurricane this morning after battering the Bahamas on Wednesday. 
• Negotiations between tens of thousands of West Coast dockworkers and their employers have stalled for much of the last three months.
• The deadline for faltering contract talks between U.S. unions and freight railroads will be extended by several weeks into early December, allowing more time to negotiate. 
• Truckload drivers made an average of $69,000 in wages and bonuses in 2021, up 18% from 2019, according to the American Trucking Association. 
• Drought-induced backups on the Mississippi River are halting key scrap metal shipments to global steelmakers.
• Firms in China’s port hub of Guangzhou and the manufacturing hub of Zhengzhou are struggling under renewed COVID-19 lockdowns.
• Containerized imports at U.S. ports are set to slow for the next several months and will likely fall 19% year over year in February, analysts say.
• Trans-Pacific blank sailings are accelerating amid weakening demand.
• Shipping container depots are running out of space to store unwanted boxes as retailer inventories run high.
• Air and ocean shipping rates will keep falling in 2023, while lower margins will weigh down truckload and less-than-truckload performance, according to shippers.
• With spot freight rates falling, shippers are negotiating down contract rates as the trucking industry enters bid season. 
• FedEx is cutting cargo flights and parking some planes in response to weak demand for package delivery.
• After reporting disappointing quarterly results last week, freight broker C.H. Robinson is rightsizing its management by laying off up to 1,200 workers.
• Speed of deliveries will take a backseat to accuracy of deliveries this holiday season, analysts say.
• TSMC, the world’s largest contract chipmaker, plans to build a second U.S. plant next to a $12 billion complex it already pledged to construct in Phoenix, Arizona.
• Germany is moving to block the sale of a semiconductor factory to a Chinese-owned company, citing security concerns.
• In the latest news from the auto industry:
  • Nissan lifted its full-year outlook after quarterly profit jumped 45% on effects of a weaker yen. The automaker is still struggling with supply-chain issues, particularly in the U.S.
  • Honda saw quarterly profit rise 16% on strong demand for its motorcycles in Asia.
  • Truck maker Iveco Group boosted its 2022 outlook as higher vehicle prices offset material and energy costs.
  • Electric-vehicle startup Lucid saw third-quarter losses widen to $670.2 million.
  • Volkswagen’s Spanish unit SEAT is moving forward with massive plans to build electric vehicles and batteries.
  • BMW says it will not scrap its lower-priced segment of gas-engine cars as part of its broader transition to electrification.
  • Volvo expects to deliver its first electric car in 2024 despite significant supply-chain problems. 
• The Indian government is fostering tools that make it easier for smaller companies to develop e-commerce, digital payments and other online services, in a bid to challenge U.S. tech giants like Amazon.
• Dockworkers at the U.K.’s Port of Liverpool called off a planned strike after reaching a pay deal with employers.
• Officials are discussing a so-called green shipping corridor between Singapore and Southern California’s San Pedro Bay port complex.
• Over local opposition, a South African court reinstated Amazon’s bid to construct a $260 million African headquarters in Cape Town.

Domestic Markets

• The U.S. reported 95,696 new COVID-19 infections and 937 virus fatalities Wednesday.
• COVID-19 cases in New York City are at their highest level since August.
• Inflation moderated in October, with the Consumer Price Index up a smaller than expected 7.7% year over year, the slowest pace since January. Core inflation sans food and energy rose 6.3%, down from a four-decade high 6.6% in September.
• First-time jobless claims rose by 7,000 last week to 225,000.
• The U.S. Federal Reserve could potentially raise its key interest rate to 6% next year, what would be the highest rate in over 20 years, according to a Reuters survey of bond strategists. 
• Recent statements by Federal Reserve officials suggest the U.S. is on the “back end” of its current inflation surge, while long-term inflation expectations are stabilizing.
• U.S. financial executives are aggressively paying down debt as interest rates rise and businesses brace for a recession.
• Just over 50% of U.S. small businesses said they were raising prices in October, the lowest in over a year but still historically high.
• U.S. property developers are canceling large portions of their projects on prospects of a sharp cooldown in the housing market next year.
• Online real estate firm Redfin laid off 13% of its staff and closed its home-flipping unit ahead of an expected slump in the housing market.
• Multiple rounds of U.S. pandemic aid may have restrained job market turnover and heavily contributed to the “Great Resignation, some experts say:

• Sales of beauty products remain strong even as consumer spending on goods weakens.
• IBM launched its most powerful quantum computer to date as part of a years-long effort to bring business value to high-speed computing.
• Amazon became the world’s first public company to lose $1 trillion in market value as economic headwinds trigger a historic selloff in its stock. 

International Markets

• Global COVID-19 fatalities are down 90% from nine months ago, according to the World Health Organization.
• Millions of residents were ordered to get tested for COVID-19 in the manufacturing hub of Guangzhou, China, as local infections topped 2,000 for two days running. New virus cases in Beijing hit their highest level in six months.
• Mexico’s inflation came in slightly below forecasts at 8.41% in the 12 months through October:

• The U.S. and Taiwan are in talks to strengthen trade and economic ties.
• The U.K. and EU are close to a breakthrough in their months-long spat over post-Brexit trading rules in Northern Ireland.
• Ukrainian officials say the nation’s economy will likely contract by 39% this year, larger than initially thought.
• The global ultra-high-net-worth population has fallen for the first time in four years as the value of equity portfolios crumbles.
• Adidas cut its 2022 outlook after quarterly sales in the COVID-hit Chinese market fell by 27%. 
• German medical device maker Siemens Healthineers is restructuring its diagnostics division in a bid to save $302 million a year.
• Canada’s Rogers Communications beat quarterly forecasts on strong demand for pricier wireless plans.
• Microsoft faces a new antitrust complaint over its cloud computing practices in Europe.
• U.S. manufacturer Chart Industries will buy U.K.-based industrial equipment maker Howden for $4.4 billion, in a bet on growing demand for clean energy technology.
• Sony is eliminating plastic packaging for electronic products, starting with earbuds and phones.
• Carbon emissions from building construction and operation, the source of 37% of global emissions, hit an all time high in 2021.

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