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Global equity markets closed mixed across each region, with the
US markets having a particularly volatile day. European credit
indices were wider across IG and high yield, while European
benchmark government bonds were higher across the region. Brent
crude closed lower, while WTI was slightly higher. US government
bonds and the US dollar were close to unchanged on the day, as both
rallied on the open of the US equity markets after being lower
overnight.
Americas
US equity indexes closed mixed after a rollercoaster ride of a
trading session; Russell 2000 -0.7%, Nasdaq -0.6%, S&P 500
+0.1%, and DJIA +0.5%.
10yr US govt bonds closed -1bp/0.67% yield and 30yr bonds
flat/1.42% yield.
CDX-NAIG closed +1bp/70bps and CDX-NAHY -20bps/355bps (series
34.9 now OTR), which is +3bps and -11bps week-over-week,
respectively.
DXY US dollar index closed -0.1%/93.26.
Gold closed -0.8%/$1,948 per ounce.
Crude oil closed +0.1%/$37.33 per barrel.
The US consumer price index (CPI) rose 0.4% in August following
0.6% increases during each of the prior two months. During August,
the CPI for energy rose 0.9% while the food index rose just 0.1%.
The core CPI, which excludes the direct effects of movements in
food and energy prices, rose 0.4%. (IHS Markit Economists Ken
Matheny and Juan Turcios)
Price declines in sectors that experienced plummeting demand
due to COVID-19 have been partially reversed over the last three
months. The core CPI rose 1.2% over the last three months (not
annualized) following a 0.6% decline over the February-to-April
period. The three-month change in the overall CPI rebounded from
-1.3% as of May to 1.5% as of August.
Despite recent monthly increases, core and headline inflation
remains subdued and below pre-COVID rates. Twelve-month increases
for core and headline CPI were low in August at 1.7% and 1.3%,
respectively, well below pre-pandemic rates of 2.4% and 2.3%,
respectively.
A sharp increase in the index for used cars and trucks (5.4%)
accounted for approximately 40% of the increase in the core CPI in
August. Other categories within the core CPI posting large swings
included apparel (0.6%), airline fares (1.2%), and lodging away
from home (0.9%). Rent of primary residence and owners' equivalent
rent each rose just 0.1%. Increases in these two components have
slowed since last winter.
Bureau of Labor Statistics (BLS) data collection efforts
continued to be hampered by the COVID‑19 pandemic. Despite extra
efforts, the percentage of prices not available for the CPI was
above historical norms in August.
Flint Hills Resources (Wichita, Kansas) has agreed to sell its
expandable polystyrene (EPS) business in Peru, Illinois, to private
equity fund Balmoral Funds (Los Angeles, California). The companies
signed a definitive agreement for the fund to purchase and operate
the EPS business through a management buyout led by industry
veteran Brad Crocker, who will serve as CEO, they say. The
transaction, for an undisclosed amount, is expected to close before
the end of the year. The EPS production facility at Peru is one of
North America's leading EPS resin producers, according to Balmoral.
Flint Hills acquired the EPS plant as part of its $350-million
purchase of Huntsman's US polymers business in 2007. The
acquisition by Balmoral "gives us the opportunity to invest further
in the business and expand on its substantial growth potential,"
says EPS plant manager Chris Eager. Balmoral "typically invests in
companies that have revenues [of] $30-500 million and require
equity investments of $10-60 million," it says.
US commercial vehicle and engine manufacturer Navistar has
posted a net loss of USD37 million on USD1.7 billion in revenue in
the third quarter of financial year (FY) 2019/20. Separately, the
company has confirmed receiving a revised bid to acquire the
company from Volkswagen (VW)'s Traton trucking division. (IHS
Markit AutoIntelligence's Stephanie Brinley)
In the third quarter (ended 31 July 2020) of FY 2019/20,
Navistar's revenues decreased 45% year on year (y/y), which the
company said was largely as a result of economic restrictions
related to efforts to contain the spread of the COVID-19 virus.
However,
Third-quarter FY 2019/20 revenues were also in comparison to
year-earlier revenues that came at the peak of the prior industry
cycle. The medium- and heavy-duty truck manufacturer also said that
in its core business (class 6 to 8 trucks and buses in the United
States and Canada), revenues were down 53% y/y.
Navistar also stated that its efforts to conserve cash and
reduce costs were having a positive effect, and the company closed
the quarter with USD1.6 billion in manufacturing cash, cash
equivalents, and marketable securities.
Navistar chief financial officer Walter Borst said that the
company's focus on temporary cash conservation actions was shifting
to sustainable cost savings. Navistar is targeting selling,
general, and administrative expenses in the range of 7% to 9% of
sales revenues.
Although Navistar reported a loss in the third quarter of FY
2019/20, the cause was largely external shocks to the automotive
industry, and Navistar showed financial discipline in those areas
that it could control. The company's EBITDA remained positive in
the quarter, although they dropped from USD281 million in third
quarter FY 2018/19 to USD73 million in third quarter FY
2019/20.
The Brazilian Institute of Geography and Statistics (Instituto
Brasileiro de Geografia e Estatística: IBGE) has reported that
industrial production jumped 8.5% month on month in July.
Plummeting values in March and April have been almost compensated
by strong growth in May, June, and July, such that industrial
production was down only 3.1% year on year (y/y) in July. (IHS
Markit Economist Rafael Amiel)
According to the IBGE, retail sales have performed even better
as by July they had jumped 29.3% from their April trough. This
indicator has fully recovered and it is now 5% above its
pre-COVID-19 virus pandemic levels.
Another data release by the IBGE earlier this week showed that
inflation amounted to 0.24% in August and annual inflation was
2.44%. Meanwhile, core inflation amounted to 0.9% at the end of the
12-month period ended August 2020. The core price index excludes
items with high price volatility such as energy and agricultural
prices.
Inflation in August was driven by higher energy prices, mainly
gasoline (petrol), and electricity. In addition, (controlled)
tariffs for internet services were allowed to go up 8.5%.
The Argentine grower and processor Ledesma has reported sales
of ARS28.9 billion (USD3.7 billion) and net profits reached
ARS735.9 million in the 2019-20 marketing year (June-May) despite
Covid-19, after suffering losses in two previous years. The
company's fruit crop reached 105,620 tons, and it sold 34,760 tons
in the fresh market and processed 67,190 tons to produce juices and
purées. In addition, it produced 472 tons of essential oils, mainly
citrus-based. It exported 95% of its production. Its fresh orange
exports totaled 28,420 pallets, mainly Valencias. On the other
hand, the company only exported 477 pallets of fresh lemons.
Ledesma expects to process 3.8 million tons of sugar cane to
produce sugar (77%) and alcohol (23%). Bioethanol may take 90% of
the sugar output. Its soya, wheat, maize and oat crops reached
59,973 tons (12% less year-on-year), 33,739 tons (35.9% less),
45,143 tons (60.5% more) and 179 tons (three and a half times
more). Finally, its meat production totaled 4,838 tons (23% more),
mainly beef. (IHS Markit Food and Agricultural Commodities' Jose
Gutierrez)
Europe/Middle East/Africa
European equity markets closed mixed; Spain -0.8%, Germany
-0.1%, Italy flat, France +0.2%, and UK +0.5%.
10yr European govt bonds closed higher across the region;
Germany/UK/France -5bps, Spain -4bps, and Italy -3bps.
iTraxx-Europe closed +2bps/56bps and iTraxx-Xover
+13bps/327bps, which is +3bps and +2bps week-over-week,
respectively.
Brent crude closed -0.6%/$39.83 per barrel.
Chemicals production in the EU suffered a steeper fall in
percentage terms in the first half of 2020 than the worldwide
decline in chemicals output, plunging by 5.2% year on year (YOY)
compared to a global decrease of 3.4% YOY, according to European
chemical industry association Cefic's latest quarterly report.
Producer prices in the EU27 countries were 4.8% lower to
end-June than in the first half of 2019, with total combined
domestic and export chemical sales for the first five months of the
year falling by 7.9% YOY to €202.2 billion ($239.6 billion), it
says.
Weak domestic demand in Europe and the deterioration of the
business environment due to the impact of COVID-19 negatively
impacted sales, it says. Chemical production capacity utilization
in the EU27 area in the first half of the year was about 9% below
the 2019 equivalent figure.
Cefic says that chemicals production in France and Italy has
been "most impacted" by the COVID-19 crisis compared to other
countries. Chemicals output in France and Italy fell by at least
12% in first-half 2020 compared to the previous year, followed by
Spain and Portugal with a YOY drop of more than 6.5%.
Belgium and the Netherlands registered a decrease of about 6%
in chemicals production over the same period, with Germany
reporting a drop of 3.6%, while Poland saw output decline by 1.7%.
The UK reported a YOY drop of 6.2% in chemicals output, Cefic
adds.
Some of the EU's chemical sectors providing for essential
supply chains during the pandemic did post growth over the period,
with soaps and detergents reporting production growth of 2.9% for
the first six months of 2020 compared to last year, it notes.
EU27 chemical exports outside the EU27 area in the first five
months of 2020 fell by €2.7 billion, or 3.7%, compared to the
prior-year period to €72.4 billion, according to the report.
EU27 chemical exports of petrochemicals to the US rose by €2.3
billion, or 8.8%. This was countered, however, by a significant
decrease of EU27 exports to the US in specialty chemicals and
consumer chemicals over the same period.
EU27 chemical exports to China totaled €6.3 billion, up 1.2%
YOY. Data for April and May showed two consecutive declines in EU27
chemical exports outside of the area, with "no clear sign of
recovery" for exports being seen, according to Cefic.
Chemical imports into the EU27 countries from outside the area
declined by 1.4% YOY, or €800 million, to €56.2 billion in the
first five months of 2020.
A fall in imports of polymers, down €2.1 billion, and consumer
chemicals, down €400 million, contributed most to the decrease in
total imports, it says. There was, however, a "significant
increase" of imports into the EU27 area of specialty chemicals and
petchems over the same five-month period, it adds.
EU27 chemical imports from China increased by 0.6% YOY to €6.5
billion.
The United Kingdom's Office for National Statistics (ONS)
reports that the economy grew by 6.6% month on month (m/m) in July
and was preceded by m/m gains of 2.4% m/m in May and 8.7% in June.
(IHS Markit Economist Raj Badiani)
Meanwhile, in annual terms, the economy in July was 11.7%
smaller compared with a year earlier.
Nevertheless, the UK's monthly GDP was still 11.7% below its
pre-pandemic level seen in February.
The further easing of the COVID-19-virus lockdown measures
occurred in early July, with hair salons, pubs, and restaurants
allowed to reopen. Indeed, accommodation and food services rose by
140.8% m/m in July but remained 60.1% below their
pre-COVID-19-virus February level. Some children returned to school
in July, resulting in education services output rising by 21.1%
m/m.
Industrial production rose by 5.2% m/m in July, led by
improving manufacturing activity. The manufacturing sector saw all
13 sub-sectors recover further lost ground from the large falls
across March and April. However, despite the continued recovery in
July, production output was still 7.0% lower than the level in
February, with manufacturing 8.7% lower.
The economy contracted by 7.6% in the three months to July
compared with the three months to April. The chart above shows that
the main sectors reported lower rates of contraction in
May-July.
The rise in GDP in July points to a record GDP gain in the
third quarter of 2020, spelling the end of the recession during the
first half of the year. A COVID-19-virus lockdown-exit strategy
will deliver an immediate resumption of growth, estimated at 11.5%
quarter on quarter (q/q) and 2.6% q/q in the third and fourth
quarters of 2020, respectively, in the August forecast update.
Germany's final August data based on national methodology from
the Federal Statistical Office (FSO) showed a month-on-month (m/m)
decline by 0.1% and a slight increase of the annual inflation rate
from July's -0.1% to 0.0%, confirming the 'flash' data released on
31 August. (IHS Markit Economist Timo Klein)
The European Union-harmonized consumer price index (CPI)
measure declined by 0.2% m/m, leading to a marginal dip of its
annual rate from 0.0% to -0.1%.
Germany's harmonized inflation nonetheless moved above the
eurozone average (-0.2%) again, and the spread between the two
actually switched from -0.4 percentage point in July to 0.1
percentage point in August. This demonstrates that Germany's VAT
cut was largely to blame for the inflation drop in July, whereas
underlying trends played more of a role elsewhere in the
eurozone.
At 0.7% year on year (y/y), the CPI excluding food and energy
as a measure of core inflation remained steady compared with July,
but this is about half the annual pace measured on average between
mid-2019 and mid-2020. The component breakdown reveals that energy
had a modest dampening impact in m/m terms in August (-0.5%), but
base effects pushed up its annual rate from -6.7% to -6.3%. The
prices of food and recreation and culture (which includes package
tours) had the largest dampening impact on August's inflation,
whereas clothing and footwear and household equipment and furniture
were the components exerting the most upward pressure.
Unlike for July, the FSO did not attempt to quantify possible
effects from the VAT cut on measured inflation, other than stating
that this factor remains an important dampening influence on the
y/y comparison throughout the second half of 2020.
The split between goods and services shows that inflation in
the former has become slightly less deflationary (the y/y rate
edged up from July's -1.4% to -1.3% in August), whereas
service-sector inflation has moderated from 1.2% to 1.0%.
Average underlying inflation, which had been at around 1.2%
during 2016-17 before firming to the 1.5% area during the last two
years, will now remain below 1% throughout the second half of 2020,
and will rebound to the 1.5% area in early 2021.
The working group on Germany's tax revenue estimates for the
whole public sector, comprising Ministry of Finance officials from
federal and Länder authorities meeting twice a year to provide the
basis for budgetary planning, has reduced its projections further
for 2021-24, compared with those published in May. (IHS Markit
Economist Timo Klein)
The projection for 2020 has stayed broadly unchanged at
EUR717.7 billion, but this steady overall figure hides the fact
that various fiscal support measures passed during June-August are
expected to lead to tax revenue losses of EUR25.5 billion that are
estimated to be exactly offset by revenue improvements related to
less pessimistic growth assumptions.
Estimates for 2024 reflect revenue losses from legislative
changes that are either exacerbated by a worsened GDP growth
assumption (2021) or are only partially offset (2022-24).
The underlying assumption for nominal GDP growth in 2020 was
lifted from -4.7% (May's projection) to -4.0%, whereas the growth
assumption for 2021 was reduced from 6.8% to 6.0%. The assumptions
for 2022-24 were raised from 2.8% to 3.0%.
Wage growth assumptions are even more important for tax revenue
estimates. For 2020, the projection has improved slightly from
-1.5% to -1.2%, and was curtailed from 4.1% to 3.2% for 2021, while
the assumptions for 2022-24 were left at 2.8%.
Corporate and asset income is much more sensitive to both the
economic cycle and changes in legislation. Thus, the projection for
2020, which had been at a catastrophic -21.1% in May, was lifted
substantially to -8.3%. This mirrors foremost the various fiscal
support measures (short-time work subsidies, grants, and loans)
that have prevented an early surge of company insolvencies and the
tax revenue losses that this would have entailed. The flip side of
this is that the projection for 2021 has been drastically reduced
from 22.8% to 3.5%. Projections for 2022-24 were lowered slightly
from 3.8% to 3.6%.
The government projects that overall public-sector tax revenues
will decline from EUR799.3 billion in 2019 (then up by 3.0% year on
year [y/y]) to EUR717.7 billion in 2020 (-10.2% y/y) before
rebounding by 7.7% to EUR772.9 billion in 2021 and 4.9% to EUR810.5
billion in 2022. Revenue growth in 2023-24 is projected at an
average of 4.4%.
The Volkswagen (VW) Group introduced a sustainability rating
for direct suppliers one year ago, and a comprehensive system
developed by RCS Global now also tracks adherence to sustainability
criteria at sub-suppliers, refineries, smelters, mines, and
recyclers. New guidelines for improvements issued to suppliers make
an active contribution to achieving improvements when risks and
shortcomings are identified. Serious audit violations may even lead
to the disqualification of suppliers from the supply chain. That
applies, for example, to small-scale mining operators when child
labor cannot be ruled out. The approach builds on the Due Diligence
Guidance of the Organization for Economic Co-operation and
Development (OECD). Under the co-operation with RCS Global it has
already been possible to identify 134 sub-suppliers and 18 mines in
the VW Group's battery supply chains and they will be monitored and
removed from the company's list of suppliers if any violations of
the code are discovered. (IHS Markit AutoIntelligence's Tim
Urquhart)
Total external reserves (including gold and other external
assets) at the National Bank of Belarus (NBB) fell by some 16%
during August to USD7.5 billion, while foreign currency reserves
declined by nearly 25%, to USD3.2 billion. (IHS Markit Economists
Alex Kokcharov and Venla Sipilä)
In cumulative terms, total external reserves contracted during
the first eight months of the year by around 21%, while foreign
currency reserves ended August some 42% lower than at the beginning
of the year.
The value of total reserves fell despite the increase in the
price of gold counteracting the impact of the decline in foreign
currency reserves on total external assets. In value terms, the
NBB's gold reserves increased by 30% during January-August.
Reserves were drained by the central bank engaging in foreign
currency interventions to stem the depreciation of the Belarusian
ruble. Confidence in the domestic currency has been damaged by
social unrest on an unprecedented scale following the contested 9
August presidential elections, which has been increasing demand for
foreign exchange.
As reported by CEEMarketWatch, the NBB used around USD352
million for external debt service during August.
The ruble's value against the US dollar weakened by 8.4% during
August alone, ending the month at a record low of BYN1.00:USD2.663.
In cumulative terms, the Belarusian currency depreciated by 21%
during the January-August period.
Asia-Pacific
Most APAC equity markets closed higher except for Australia
-0.8%; Mainland China +0.8%, Hong Kong +0.8%, Japan +0.7%, and
India/South Korea flat.
According to the Business Outlook Survey for the third quarter
of 2020, Japan's current Business Survey Index (BSI) for large
enterprises rose by 49.6 points to 2.0, suggesting improving
business conditions following three quarters of decline. (IHS
Markit Economist Harumi Taguchi)
Despite a V-shaped recovery in line with the resumption of
business activity, the seasonally adjusted reference series of the
BSI remains below zero (up 42.5 points to -1.1), reflecting
persistent sluggish business conditions for large manufacturing
enterprises (up 42.5 to -5.1).
The future-conditions BSI suggests all enterprises anticipate a
gradual improvement of business conditions. However, the outlooks
remain gloomy, as the BSI for large enterprises shows easing upward
momentum, while the BSI for small and medium-sized enterprises for
the next two quarters is holding at zero. The weak outlooks are
largely attributed to outlooks of sluggish domestic business
conditions.
The outlook for sales of all industries in fiscal year (FY)
2020/21 (ending 31 March) was revised down to a 6.8% year on year
(y/y) drop, from a 5.2% y/y drop, because of outlooks for a weak
recovery.
Ordinary profit outlooks were revised up slightly to a 23.2%
y/y drop, from a 23.5% y/y decline, largely reflecting upward
revisions in the information and communication, and wholesale and
retail sales sectors.
Labor demand remains resilient, as a broad range of enterprises
(particularly non-manufacturing industries) faced labor
shortages.
Fixed investment plans for FY 2020/21 were revised down from a
4.4 % y/y drop to a 6.8% y/y drop.
Toyota Research Institute-Advanced Development (TRI-AD) has
announced that it will set up Woven Capital, a USD800-million
global growth-stage investment fund, to add to its ability to
achieve its vision of 'Mobility to Love, Safety to Live'. This will
be part of the new Woven Planet Holdings, which will begin
operations in January 2021. The investment fund will assist the
holding company by investing in startup companies in the Toyota AI
Ventures that are focused on developing innovative technologies and
business models in areas such as autonomous mobility, automation,
artificial intelligence (AI), machine learning, data and analytics,
connectivity, and smart cities. Woven Capital will also invest in
other venture capital funds to broaden and accelerate its global
coverage. TRI-AD was established in March 2018 as a joint venture
(JV) between Toyota Motor Corporation, Denso, and Aisin to provide
software for autonomous vehicles (AVs). TRI-AD is helping Toyota
achieve its goal of introducing a Level 2 AV commercially in 2020.
In July, TRI-AD announced that it will expand and improve its
operations by forming Woven Planet Holdings and two new operating
companies: Woven CORE and Woven Alpha. The new holding company will
involve a capital of JPY20 billion (USD188 million), while Woven
CORE will involve JPY50 million and Woven Alpha JPY100 million.
Woven Planet Holdings will act as a decision-maker for the entire
group and provide corporate shared services to the operating
companies. (IHS Markit AutoIntelligence's Nitin Budhiraja)
Zhejiang expanded its list of major investment projects to
include another 147 projects worth of CNY549.6 billion (USD78.5
billion) in total, of which CNY46.4 billion worth of investment
should be completed in 2020, according to the local development and
reform commission on 8 September. (IHS Markit Economist Lei Yi)
Newly added projects cover sectors including agriculture, water
resource management, transportation, energy, industry, urban
development, and modern services.
After this adjustment, Zhejiang now has 817 major projects
arranged for 2020, with a total investment value of CNY3.6
trillion; CNY461.4 billion worth of investment is set to be
completed within 2020.
The adjustment in investment plan is expected, as Zhejiang had
completed 76.2% (CNY316 billion) of the pre-adjustment investment
target though the end of July. In 2019, Zhejiang expanded the major
project list in November, after completing the original full-year
investment target of CNY390 billion in the first 10 months.
The Chinese new vehicle market experienced sales gain for the
fifth straight month in August. New vehicle sales on a wholesale
basis increased by 11.6% year on year (y/y) to 2.19 million units
in China during the month, while production rose by 6.3% y/y to
2.12 million units, according to preliminary data from the China
Association of Automobile Manufacturers (CAAM). (IHS Markit
AutoIntelligence's Abby Chun Tu)
Thanks to a rebound in new vehicle demand that began in April,
vehicle sales and production volumes in the year to date (YTD) are
narrowing the gap each month with the equivalent period of last
year.
In the YTD for August, China's new vehicle sales were down 9.7%
y/y at 14.55 million units, while production volumes contracted by
9.6% y/y to 14.43 million units.
The passenger vehicle (PV) sales increased of 6.0% y/y to 1.76
million units in August, while PV production fell by 0.1% y/y to
1.69 million units.
The CAAM definition of passenger vehicles includes sedans,
sport utility vehicles (SUVs), multi-purpose vehicles (MPVs), and
minivans.
In the YTD, sales of PVs were down 15.4% y/y at 11.29 million
units, while production of PVs fell 15.5% y/y to 11.18 million
units.
Commercial vehicle sales (including medium and heavy vehicles)
continued to rally in August, although the pace of growth slowed
compared with growth in July. Sales volumes of commercial vehicles
surged 41.6% y/y to 431,000 units during August, contributing to
the strong rebound in new vehicle sales.
Driven by surging market demand, commercial vehicle production
increased 42.8% y/y to 425,000 units in August.
In the YTD, sales of commercial vehicles have risen by 17.3%
y/y at 3.263 million units, while production of commercial vehicles
increased by 19.3% y/y to 3.256 million units.
Sales of new energy vehicles (NEVs), which include battery
electric vehicles (BEVs), plug-in hybrid electric vehicles (PHEVs),
and fuel-cell vehicles (FCVs) , increased 25.8% y/y to 109,000
units in August, while NEV production rose by 17.7% y/y to 106,000
units.
The continued rebound in China's auto market has been aided by
policy measures aimed at boosting sales. The incentives include
city-level auto-purchase incentives in the form of subsidies and
preferential policies in top-tier cities to ease controls on new
vehicle registrations.
IHS Markit's forecast on Greater China's light-vehicle
production has been adjusted upwards in our August update. The
forecast on light-vehicle production volumes in the region has been
increased by 400,000 units and 73,000 units for 2020 and 2021
respectively, compared with our July forecast.
Baidu has opened the "Apollo Go Robotaxi" service for the
public in the Chinese city of Beijing, reports Xinhua News Agency.
The company has deployed 40 robotaxis that run in a trial area with
a total length of 700 kilometres (km). The route has 100 pick-up
and drop-off locations covering major residential and business
areas in the city's Yizhuang, Haidian, and Shunyi districts. Users
can hail a robotaxi ride after registering on Baidu Maps or the
Apollo website. Zhenyu Li, corporate vice-president of Baidu and
general manager of Intelligent Driving Group, said, "Baidu Apollo
will continue pushing for the commercial application of autonomous
driving. With our technology and platform advantages, we will
contribute more to the development of autonomous driving and smart
transportation in Beijing and support the city to become a
world-leading AI [artificial intelligence] innovation hub." Baidu
is the first company to deploy robotaxis that are picking up
passengers in Beijing. (IHS Markit Automotive Mobility's Surabhi
Rajpal)
Tesla's Model Y production in China is likely to begin ahead of
schedule, as early as November, reports InsideEVs. The report
mentioned that work is progressing rapidly on the second phase
(Phase 2) of the Shanghai Gigafactory, at which the Model Y will be
produced, and that the main structure of the plant has been
completed. Tesla is said to have proceeded with "interior
decoration" and "electromechanical works", with the former set to
be completed by October and the latter by November. Several reports
surfaced recently centering on the progress of the Shanghai
Gigafactory's Phase 2. Information from these reports is still
largely aligned with previous estimates given by Tesla regarding
the Phase 2 progress. (IHS Markit AutoIntelligence's Abby Chun
Tu)
Hyundai has kicked off a "global advocacy program" to explain
its efforts in hydrogen fuel-cell technology and has expanded the
availability of the Nexo fuel-cell electric vehicle (FCEV) in the
United States. The new campaign is called Hydrogen to You (H2U) and
it has the goal of raising awareness of Hyundai's leadership in
hydrogen fuel-cell technology, featuring the Nexo FCEV. The H2U
campaign is focused on Germany and the automaker has selected
several Berlin-based brand ambassadors. Hyundai said in its
statement on the new campaign, "The campaign challenges the
ambassadors to reflect on the industries they work in and
demonstrate how hydrogen fuel cell mobility fosters a sustainable
lifestyle and positively impacts their everyday life, fostering a
healthy environment and improving the economy and society for a
better future." The H2U ambassadors include a DJ, a model, a
scientist and "YouTuber", a photographer, a journalist, a tech
influencer, and a car-tuning expert. Separately, Hyundai announced
on 10 September that it has expanded the availability of the Nexo
FCEV in the US by including a dealership in northern California in
its network distributing the model. The availability of the Nexo in
the US and Canada has been centered on California, as the state has
more hydrogen refueling infrastructure than other regions. The
expansion announced on 10 September includes the Nexo being
available in Sacramento, California. In California, the Nexo is
available for lease only, for a fee of USD379 per month for the
Blue model and USD449 per month for the Limited model, and for a
36-month term. Sales of FCEVs are hampered by the availability of
hydrogen refuelling, but Hyundai has been more involved in
researching and deploying the technology than most automakers; the
Nexo is the follow-up to the Tucson-based FCEV. (IHS Markit
AutoIntelligence's Stephanie Brinley)
Coal imports into India increase for the second consecutive
month. As per the latest update from the Ministry of Commerce and
Industry, steel production along with electricity generation in
July 2020 surged 7% m-o-m. The rebound in steel production is
triggered by the resumption of infrastructure activities by the
government. However, cement production declined 8% m-o-m. Domestic
coal production from India's largest miner CIL during August 2020
stood at 37.2 metric tons (mt) (down 1% m-o-m and up 7% y-o-y). The
offtake for the said period stood at 44.3mt (up 2% m-o-m and 10%
y-o-y). Despite the recovery in demand, CIL is still having high
stockpiles calculated at close to 62mt (down 10% m-o-m but up 158%
y-o-y). In the first eight months of the year, CIL production
totaled at 409mt, up 1.1% y-o-y. For the same period, CIL
dispatches are calculated at 373mt, down 8% y-o-y. Anticipating a
rebound in demand from the power plants as well as industries the
imported coal arrivals in the country have started recovering. As
per IHS Markit's Commodities at Sea, total coal arrivals into India
during August 2020 is calculated at 16.8mt, with thermal and
metallurgical coal arrivals at 13.1mt (up 20% m-o-m, but still down
6% y-o-y) and 3.6mt (up 16% m-o-m and down 27% y-o-y), resp. Total
coal arrivals were 19% higher versus the previous month but still
11% lower on an annual basis. In the first eight months of the
year, total imported coal arrivals in the country were calculated
at 140.8mt, down 15% y-o-y. Thermal and metallurgical arrivals
during the first eight months of this year were calculated at 104mt
(down 17% y-o-y) and 36.7mt (down 5% y-o-y), respectively. (IHS
Markit Maritime & Trade's Rahul Kapoor and Pranay Shukla)
Posted 11 September 2020 by Chris Fenske, Head of Capital Markets Research, Global Markets Group, S&P Global Market Intelligence
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