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Most major APAC equity markets closed higher, while European and
the US markets closed lower. US and European benchmark government
bonds closed lower, with the US dollar also lower on the day.
iTraxx and CDX indices were close to flat across IG and high yield,
while oil was sharply lower. US markets will likely be focusing on
tomorrow's (Thursday) US initial claims for unemployment insurance
after last week's report showed an unexpected uptick in claims.
Americas
US equity markets turned lower after a 3pm EST report that the
vote on a US COVID-19 relief package may not occur until after the
election; Russell 2000 -0.9%, DJIA -0.4%, Nasdaq -0.3%, and S&P
500 -0.2%.
10yr US govt bonds closed +3bps/0.82% and 30yr bonds
+5bps/1.64% yield.
White House officials and House Speaker Nancy Pelosi on
Wednesday opened the door to passing a coronavirus relief package
after the election, a signal that time and political will has
likely run out to enact legislation before then. (WSJ)
CDX-NAIG closed -1bp/57bps and CDX-NAHY flat/376bps.
DXY US dollar index -0.5%/92.64 as of 5:35pm EST.
Gold closed -1.1%/$1,930 per ounce and silver +1.0%/$25.24 per
ounce.
Crude oil closed -4.0%/$40.03 per barrel.
The oil market remains deep in the throes of a protracted
demand crisis, with mass vaccine deployment the only path back to
100 MMb/d global liquids demand. The critical time for this
transition is likely to be 2Q-3Q2021. Until then, we expect Brent
to remain below $50/bbl as oil markets struggle with weak and
stagnant demand. (IHS Markit Energy Advisory's Roger Diwan, Karim
Fawaz, Justin Jacobs, Edward Moe, and Sean Karst)
Evidence is mounting that the demand recovery has stalled, and
we expect global liquids demand to plateau through March 2021 as
early signs of fresh spikes in COVID-19 cases are pointing to a
difficult winter.
The loss of momentum in end-user demand as mobility and
economic drivers lose steam will be compounded over the winter by a
slowdown in Chinese crude buying after it's binge earlier this year
and broad-based refining headwinds.
With demand remaining weak, the market's attention will turn to
the OPEC+ group's ability to keep supply off the market to continue
to tighten fundamentals and draw down inventories. We believe OPEC+
will be forced to extend its cuts well into 2022, keeping very
large volumes of spare capacity on the sidelines.
Low oil prices and a more conservative approach to deploying
capital will take fuel out of the shale growth engine. With prices
in the $40-45/bbl range through the first half of next year, our
base case forecast sees US production holding largely flat at
around 11.1-11.2 MMb/d in 2021 and much of 2022 as companies have
enough capital to cover their maintenance spending and deliver
small returns to shareholders, but not to generate meaningful
growth.
Iran looms large over the market recovery in the short- and
medium-term. Joe Biden's commanding lead in presidential election
polls is bringing back to the fore the likely partial or full
return of the 2.0 MMb/d of Iranian oil under sanctions.
Some corners of the market have started to forecast a
post-COVID supercycle, fueled by a better-than-expected demand
recovery and inadequate investment in new supply as the energy
transition prematurely saps capital from the upstream sector. While
we do find a continuation of tightening conditions into 2022,
helping set the market and global upstream industry on firmer
footing, we find the supercycle case unconvincing.
From a fundamental standpoint, a sustained multi-year
resource-induced supercycle is unlikely because the resource to
meet decelerating global demand needs through most of the 2020s
clearly exists if prices cross $70/bbl, including short-cycle
barrels. The emerging carbon constraint is real and will shape the
future of the upstream industry, but the supercycle case overstates
its impact over the next five years.
Passenger throughput at US airports averaged over the last week
was 64.2% below the year-ago level, according to the TSA, a slight
improvement over the prior week, when throughput was down 65.2%.
(IHS Markit Economists Ben Herzon and Joel Prakken)
GM announced a series of planned investments in US
manufacturing on 20 October, with the largest and most significant
being a USD2-billion investment to convert its plant in Spring
Hill, Tennessee, from its current ICE vehicle production to
production of both ICE and electric vehicles, as GM already does at
its Orion Township plant in Michigan. The investment will enable
the Spring Hill plant to produce EVs, including the Cadillac Lyriq.
GM says that the investment includes "major expansions" to the
paint and body shops and "comprehensive upgrades" to the general
assembly facilities. The investment in general assembly will
include new machines, conveyors, controls, and tooling. The work on
this plant will begin immediately, the company said. A GM
spokesperson confirmed to IHS Markit that, while the work will mean
some downtime at the plant, this is not expected to be extensive,
as it is for the company's Factory Zero, formerly the
Detroit-Hamtramck Assembly plant. GM's revealing of the GMC Hummer
EV has been among the most anticipated industry events of 2020,
although GM has been gradually releasing information on its EV
technology for months. Given that GM's shift towards EV technology
is about much more than one product or brand, it may help position
GM as an EV technology leader. GM's announcement of the investment
in EV production on the same day as the reveal of the electric
pick-up shows that the GMC Hummer EV is not a one-off project. (IHS
Markit AutoIntelligence's Stephanie Brinley)
Through a Medium blog post, Ford Autonomous Vehicles has
announced its latest autonomous test vehicle, which it says is the
fourth generation. This version is based on the Ford Escape Hybrid,
and is also significant for being the "architecture and platform we
have chosen to use to bring our autonomous vehicle service online,"
according to John Davis, Ford autonomous vehicle (AV) chief
engineer. In several ways, this iteration is the most significant.
Prior to this Escape Hybrid, Ford had been using the Fusion sedan.
The Escape Hybrid is characterized as "launch intent," however.
Davis says that it has the components Ford believes will be needed
to support commercialization. Davis also confirmed via email to IHS
Markit that the interior is being redesigned "to create the best
experience possible to support the movement of people and goods."
More details on those changes will be provided later, however. As
automakers and technology suppliers come closer to resolving issues
with Level 4 autonomy, we should expect an increase in the volume
of news and announcements. These technologies have been in
development for several years, with many having targeted 2021 for a
commercial launch and some having targeted 2020. The launch targets
were also based on whether the technology was mature enough, and
programs are being held back rather than launching prematurely.
However, General Motors (GM) has recently received approval to test
without a backup driver in California and Waymo has announced
opening its Arizona program to public riders, instead of only its
first early program participants. Ford also announced earlier in
October several milestones for test programs, particularly in
Austin where Ford has selected the site for its planned autonomous
vehicle terminal. (IHS Markit AutoIntelligence's Stephanie
Brinley)
Canada's consumer prices were relatively unchanged from a month
earlier again as inflation ticked up 0.1% on a seasonally adjusted
basis (sa) and ticked 0.1% lower on a non-seasonally adjusted basis
(nsa). (IHS Markit Economist Arlene Kish)
Annual inflation accelerated slightly to 0.5% year on year
(y/y) nsa and 0.6% y/y sa.
The core consumer price index (CPI)-trim quickened while the
other core inflation measures were steady, maintaining an average
1.7% y/y.
The goods price inflation (-0.4% y/y) was the weakest since May
and the services price inflation (1.3% y/y), which more than
doubled from last month, was the highest since June.
Low and slow inflation trends linger, keeping the Bank of
Canada comfortably on the sidelines for a while longer as quarterly
inflation rates exactly match expectations in the July Monetary
Policy Report.
Weaker gasoline prices in October will slow the Canadian
inflation outlook for the final quarter of the year, slowing the
annual average pace to 0.8% in 2020 and 1.4% in 2021.
The decline in the gasoline price index was in line with
expectations. Going forward, gasoline's October price decline from
a month earlier is putting more downward price pressures on the
overall index on a monthly and annual basis.
Food price inflation is decelerating thanks to lower prices for
food from stores at 1.3% y/y, the slowest pace in almost two
years.
Yet during the pandemic, food purchased from restaurants
inflation has been relatively unchanged around 2.2% y/y as fast
food and takeout restaurant prices jumped 2.5% y/y, which is a
0.8-percentage-point leap from the previous month's pace. October
restrictions on indoor dining in some regions are likely to put
downward pressure on demand.
Clothing and footwear price declines were larger in September
thanks to big discounts on women's clothing on lower demand.
However, the upward price pressure contribution from the
transportation price index was from higher purchase of passenger
vehicle prices in addition to passenger vehicle insurance premiums
on stronger demand. Public transportation prices are falling 1.2%
on smaller price declines for air transportation on extremely soft
demand after the summer months.
Tuition fees reversed course with the annual update, rising
1.9% y/y from the previous 3.6% y/y decline over the past 12
months. This was due to a 6.0% y/y leap in Alberta after the
tuition freeze ended. Plus, Ontario's tuition fees increase was
0.3% y/y, after the government enforced tuition price cuts (-8.9%
y/y) in the 2019 school year.
Europe/Middle East/Africa
European equity markets closed lower across the region; Italy
-2.0%, UK -1.9%, Spain -1.7%, France -1.5%, and Germany -1.4%.
10yr European govt bonds closed lower across the region; UK
+6bps, Italy +4bps, and France/Spain +1bp.
iTraxx-Europe closed flat/55bps and iTraxx-Xover
-4bps/327bps.
UK public-sector net borrowing (excluding public-sector banks;
PSNB ex) was GBP208.5 billion (USD267.7 billion) in the first six
months of the current fiscal year (April to September), up from
GBP34.0 billion a year earlier. This was the highest borrowing in
any April-September period since records began in 1993. (IHS Markit
Economist Raj Badiani)
Central government net cash requirements were GBP246.3 billion
in April to September 2020, up from GBP33.2 billion in the
comparable period a year earlier. Central government finances are
displaying considerable stress from the COVID-19 crisis.
Substantial fiscal costs are resulting from the public health
measures and policies deployed to support businesses and
households.
Chancellor of the Exchequer (Finance Minister) Rishi Sunak has
revealed that direct spending to combat the COVID-19 crisis has
risen to GBP158.7 billion. Including the new measures announced in
his summer statement, direct spending will rise to GBP190 billion,
or around 9.5% of nominal GDP (estimated at GBP1.9876 trillion in
2020).
The ONS reports that general government borrowing
(public-sector net borrowing excluding public-sector banks; PSNB
ex) stood at GBP36.1 billion in September, which was GBP28.4
billion higher than a year earlier. This was third highest
borrowing in any month since records began in 1993.
Central government receipts collected by HM Revenue &
Customs fell for the seventh straight month in September. They
declined by 13.4% year on year (y/y) to GBP52.5 billion, pulled
down by lower-than-normal economic activity, job losses, and
companies deferring tax payments.
Central government expenditure increased by 30.2% y/y to
GBP77.8 billion in September. This partly reflected the cost of the
Coronavirus Job Retention Scheme (CJRS) and Self-Employment Income
Support Scheme (SEISS), higher grants to local authorities,
increased funds for frontline public services, and emergency
funding for Transport for London.
The furlough schemes (CJRS and SEISS) added GBP52.7 billion to
borrowing in the April-September period. In September, the total
cost of the CJRS and SEISS schemes was GBP4.3 billion.
The UK's net debt position increased by 23.0 percentage points
over the year, standing at 103.5% of GDP in September (see second
chart below), the highest level since 1960. In monetary terms, it
was at a record high of GBP2.06 trillion, more than GBP274.0
billion than at the same time in 2019.
According to the IHS Markit October forecast, general
government borrowing requirements in the current fiscal year (April
2020 to March 2021) are likely to be at least 17% of GDP, or in
excess of GBP350 billion. Meanwhile, the fiscal watchdog, the
Office for Budget Responsibility, suggests that borrowing in the
current financial year could exceed GBP370.0 billion.
According to the Office for National Statistics (ONS), UK
consumer price index (CPI) inflation rose to 0.5% in September
after falling back notably to a five-year low of 0.2% in August.
(IHS Markit Economist Raj Badiani)
During the first nine months of 2020, inflation averaged 1.0%,
well below the Bank of England's target of 2.0%.
A major development was the ending of the government's "Eat Out
to Help Out" scheme, which ran from Monday to Wednesday during
August, offering 50% off food up to a value of GBP10 (USD13). This
scheme provided discounts for more than 100 million meals.
Value-added tax (VAT) has been cut from 20% to 5% in the
hospitality, accommodation, and holiday attraction sectors, which
was a negative pull on inflation in August and September.
Restaurant and café prices rose by 1.0% year on year (y/y) in
September after falling by 2.6% y/y in August, which was the first
annual drop since records began in 1989.
Clothing and footwear prices continued to slide, falling by
1.5% y/y in September and 1.3% y/y in the first nine months of
2020. They have fallen for seven straight months, which illustrates
continued pressure on some retailers to price generously to attract
absent consumers.
Energy-related prices continued to slide on an annual basis,
led by average petrol prices being 11.0% lower than a year earlier.
A key factor was global crude oil prices, which fell by 34.5% y/y
to average USD40.91 per barrel in September.
Airfares fell in August, unprecedented in the peak month of the
holiday season. However, the drop in airfares normally observed in
September because of the end of the school holidays was much less
pronounced this year. The ONS reports that "prices are subdued this
year, as fewer people have been travelling abroad".
Meanwhile, all-services price inflation climbed to 1.4% in
September, compared with 0.6% in August; for goods, it stood at
-0.3%, from -0.2% in August.
Core inflation, excluding energy, food, alcoholic beverages,
and tobacco prices, increased from 0.9% in August to 1.3% in
September.
Overall, we expect several factors to continue to apply
downward pressure on the inflation rate in the next few months.
They include:
The effect of notably lower global crude oil prices, compared
with a year earlier, remains an important narrative. Specifically,
crude oil prices (dated Brent) are expected to average a multi-year
low of USD41.3 per barrel (/b) in 2020, down from USD64.3/b in
2019. This implies that crude oil prices in y/y terms will fall,
probably by around one-third in the latter stages of 2020, placing
sustained, downward pressure on automotive fuel and energy utility
prices.
The VAT cut for the hospitality and accommodation sector runs
from 15 July 2020 to 12 January 2021.
Severe GDP losses in the first half of this year, in tandem
with collapsed consumer spending, will limit underlying retail
price pressures on high-street and online stores.
Many retailers hit previously by zero footfall because of the
closure of their premises will resort to generous pricing to shift
their unsold inventories.
Uber plans to invest more than GBP5 million (USD6.5 million)
towards developing public charging infrastructure in some of the
poorest boroughs of London (United Kingdom). With this move, the
company aims to encourage its drivers to switch to electric cars.
The company took this decision after discovering that drivers who
do not live in affluent areas lack sufficient access to charging
infrastructure to make the switch. Jamie Heywood, Uber's regional
general manager for Northern and Eastern Europe, said, "Drivers
consistently tell us that having reliable, accessible charging near
where they live is a key factor when deciding if they should switch
to electric. If we address this challenge for professional drivers
now, it will help create a mass market for electric vehicles in the
years to come. As we all know this is critical if the UK is to
achieve our goal to be net-zero." The company plans to invest the
money by 2023 and is expecting to work with areas that have a low
number of charging facilities, such as Newham, Brent, and Tower
Hamlets, reports the Guardian. (IHS Markit Automotive Mobility's
Surabhi Rajpal)
Germany's Ministry of Transport is planning to draft
legislation to allow driverless vehicles to operate on streets,
reports Reuters. This legislation will allow companies to deploy
these vehicles for regular operation and not just for testing, as
is currently the case. In a draft document, the ministry says that,
initially, the driverless vehicles will be deployed in defined
operating zones. The document states that, potentially, these
driverless vehicles could be used in logistics, in shuttle services
for employees, and to transport people between medical centres and
nursing homes. The working draft document states that, currently,
there is no uniform framework for autonomous vehicles in Europe.
Therefore, it aims to define which technical requirements vehicles
with an autonomous capability must meet and where these vehicles
may be deployed. Overall, the ministry considers that driverless
cars will be safer on the roads than those driven by people, saying
"the vast majority of all traffic accidents in Germany are based on
human error". This development follows a recent announcement by
German Chancellor Angela Merkel that the country should take a
"pioneering" role in autonomous vehicle field. She also announced
plans to issue regulation that will enable Germany to be the "first
country in the world to permit driverless vehicles in regular
operation". The country aims to put cars with partial autonomy on
roads from 2022. (IHS Markit Automotive Mobility's Surabhi
Rajpal)
Responding to rising demand for poultry meat, Nordic meat
processor Atria is to ramp up production capacity in Finland
through the largest investment in its history. The company is
investing about EUR155 million to construct a new processing plant
on its existing site in Nurmo. The project includes new
slaughtering, cutting and packaging lines and will boost poultry
production capacity by approximately 40%. Atria said the new
processing plant will help strengthen its position as market leader
for poultry products in Finland. It will also enable the company to
increase exports and enable the development of a product portfolio
for further processed products. Poultry consumption has been
increasing rapidly in Finland - rising by almost 4% per year
between 2010 and 2019. The consumption of both processed and
unprocessed poultry meat is forecast to continue increasing over
the next few years. Highlighting Atria's ability to produce poultry
without antibiotics, Gröhn noted the importance of labelling to
show consumers the origin of the chicken all the way to the farm.
Atria said construction work would begin as soon as possible with
an estimated completion date of 2024 at the earliest. (IHS Markit
Food and Agricultural Commodities' Max Green)
Russian car production has declined 25.9% year on year (y/y) to
848,000 units in the first three quarters of 2020, according to
data from the Russian Federal State Statistics Service. The
country's carmakers recorded signs of improvement in September with
142,000 units produced, which was an increase of 5.7% y/y. If there
are prolonged and highly difficult market conditions this may cause
some foreign OEMs to question their commitment to the market in the
long term, with General Motors (GM) and Ford both withdrawing from
Russia in recent years. Prior to the last financial crisis, Russia
was on target to overtake Germany as the European region's biggest
market and exceeding sales of 3 million units, with the
light-vehicle market posting a record figure of 2.96 million units
in 2008. However, it was one of the worst hit by the 2008/09
financial crisis (although the effects landed later than in other
major markets). For 2020 IHS Markit sees light-vehicle production
at 1.18 million units, down from 1.61 million units in 2019. (IHS
Markit AutoIntelligence's Tim Urquhart)
The wide Georgian trade deficit continued to narrow in the
third quarter, with both imports and exports contracting. Similar
trends are likely to continue in the near term even if at a slower
pace, while the flexible exchange rate will continue to be
instrumental in keeping the external imbalances manageable. (IHS
Markit Economist Venla Sipilä)
According to the Georgian National Statistical Office
(GeoStat), Georgian goods exports in the third quarter of 2020
contracted by 5% year on year (y/y), after falling by a fourth y/y
in the second quarter. Imports fell by 12.8% y/y following a slide
of some 30% y/y in the second quarter.
As a result, the trade deficit in July-September narrowed by
around 18% y/y, after moderating by 34% y/y in the second quarter.
Settling at USD3.3 billion, the cumulative trade gap for
January-September narrowed by 18.5% y/y, as exports fell by 12.1%
y/y and imports diminished by 15.9% y/y.
Exports to the Commonwealth of Independent States (CIS) fell by
nearly 19% y/y, while exports to the European Union also contracted
somewhat faster than average. In contrast, Georgia's exports to
other countries increased by approximately 29%.
The above was mainly explained by soaring exports to China,
which was Georgia's leading export market in January-September,
leaving Azerbaijan and Russia to the second and third places,
respectively. A share of 14.8% of Georgian goods exports were
directed to China, significantly up from 4.6% in the first nine
months of 2019. Exports to Ukraine, Turkey, Armenia and the United
States also fell significantly.
Meanwhile, rising CIS imports in the third quarter compensated
for sharply falling imports from other countries, including those
in the EU. In January-September, imports fell from all the top 10
countries apart from Armenia.
Turkey remained the leading import provider, even after a fall
of 14.8% y/y in imports. The relatively modest fall of 5.1% y/y in
Russian imports contributed to the overall growth of CIS
imports.
Copper ores and concentrates and motor cars remained the two
most important export good categories, with shares of around 23%
and 13%, respectively. Motor cars, copper ores and concentrates,
and petroleum and petroleum products remained the leading import
good categories.
The contraction of imports is helping to counteract the impact
of falling exports on the trade balance, but the trade deficit is
now narrowing at a decelerating pace. This exactly matches our
expectations.
Turkey's Automobile Joint Venture Group Inc. (Türkiye'nin
Otomobili Girişim Grubu: TOGG) has announced the signing of a
letter of intent to partner with Chinese-based lithium-ion
battery-producing company Farasis Energy Inc. for the use of the
latter's battery cells in its range of TOGG products, reports the
Daily Sabah. According to a company statement, under the agreement
the battery cells will be provided by Farasis, while the battery
modules and packs will be jointly developed as well as produced in
Turkey. TOGG CEO Gürcan Karakaşsaid, "The agreement was signed as a
result of a large-scale evaluation process initiated in 2018 during
which more than 30 global battery suppliers have been evaluated,
within the framework of confidentiality agreements (NDAs),
including possible domestic collaborations. Among them, the company
that best met our technical, commercial and strategic criteria and
one of the world's leading li-Ion battery manufacturers, Farasis,
has been chosen as our business partner." He added, "TOGG's
mobility ecosystem will become an important regional player that
develops technology and creates serious economic value." The
partnership is aimed at reducing Turkey's dependence on foreign
energy, improving battery research and development capabilities to
accelerate the development of a zero-emission future, and also
attracting more EV projects in Turkey. In August, TOGG announced
the signing of an agreement with German-based automotive
engineering services provider FEV to collaborate on the production
of a domestically made electric vehicle (EV) in Turkey . In July,
TOGG started construction of a production facility in Bursa. Also
in July, EDAG Engineering, a Wiesbaden (Germany)-based independent
engineering company that serves the automotive industry, opened its
first office in Turkey as part of its partnership with TOGG. (IHS
Markit AutoIntelligence's Tarun Thakur)
NESBITT Investment Nigeria Limited has acquired Peugeot
Automobile Nigeria (PAN) and is taking over management of PAN as
the core investor, reports the Guardian. NESBITT will invest USD150
million in Peugeot over the next three years for retooling and the
upgrading of the automaker's assembly line, supporting
infrastructure as well as working capital. PAN Nigeria chairman
Ahmed Wadada Aliyu said, "We treasure our human capital and
strongly believe in them to drive our visions and aspirations for
PAN Nigeria and that is why we are immediately putting in place an
attractive condition of service that will retain and motivate our
human capital and also attract the best hands, so as to restore PAN
Nigeria to its number one position in Nigeria and within the ECOWAS
[Economic Community of West African States] region." He added, "PAN
under the supervision of the board shall undergo massive
restructuring, and in so doing, we shall observe strict governance
protocols, transparency, business integrity, efficiency and ethics
in all our undertakings." Aliyu has also appealed to the Central
Bank of Nigeria (CBN) and other assembly plants to make foreign
exchange available for their imports. The acquisition has been made
with the aim of eventually launching new and affordable vehicles
for Nigerians, with the support of car-financing schemes to
increase vehicle reach. (IHS Markit AutoIntelligence's Tarun
Thakur)
Asia-Pacific
APAC equity markets closed higher today except for Mainland
China -0.1%; Hong Kong +0.8%, South Korea +0.5%, India +0.4%, Japan
+0.3%, and Australia +0.1%.
Ola Källenius, chairman of Daimler and Mercedes-Benz, said
China will remain Mercedes-Benz's biggest growth market in the next
decade. The head of the premium carmaker made the remarks during a
recent interview with ICFW, according to Reuters. "Last year we
sold around 700,000 passenger cars in China. The next biggest
market is the U.S. with between 320,000 and 330,000 cars. In the
next 10 years we also expect the biggest growth in China."
Källenius was quoted saying. He also took an open attitude toward
reviewing the group's production locations in the face of
increasingly strained relations between China, the United States
and Europe. "We need to look at our production footprint and where
it makes sense, shift our production," added Källenius. Källenius's
remark did not give specifics regarding its production plan,
especially information regarding further localisation of
higher-segment models, for the Mercedes-Benz brand and its AMG
performance line. However, strong demand from Chinese consumers for
premium vehicles and the potential the market holds for the growth
of AMG will place China at the center of the Daimler's business
development plan. (IHS Markit AutoIntelligence's Abby Chun Tu)
Swancor Renewable Energy (SRE) has further strengthened its
presence in Taiwan with the signing of a Memorandum of
Understanding (MOU) with Taiwan's Metal Industries Research and
Development Centre (MIRDC). The MOU will see the two parties
cooperate on supporting and developing technology, and the local
supply chain, for floating wind in Taiwanese waters. The MOU comes
shortly after SRE's September announcement that it progressing the
development of 4.4 GW of offshore wind projects in the northwestern
territorial waters of Miaoli County in Taiwan. The development is
expected to achieve operations post-2025, subject to various
government approvals, project contracts, and financing, and will
cover about 18 to 20 kilometers over three sites -Formosa 4-1,
Formosa 4-2, and Formosa 4-3. Both bottom-fixed and floating
foundations will be considered for the development. SRE has led the
development of 504 MW of offshore wind farms to date through
Formosa 1 and Formosa 2. (IHS Markit Upstream Costs and
Technology's Melvin Leong)
Snacking has become the Chinese 'fourth meal' and consumption
of nut is growing thanks to the advertising of the health benefits
of various nuts in recent years. Three Squirrels, one of the most
well-known Chinese consumer nut companies, announced that its
wholly-owned subsidiary East China Supply Chain has signed an
'Investment Agreement' with Anhui Wuwei Economic Development Zone
Management Committee. Three Squirrels will cooperate with its
suppliers and plan to build a Three Squirrels Alliance Factory. The
total investment will be CNY2.06 billion (USD303 million). The
first phase will cost CNY1.0 billion and East China Supply Chain
will contribute less than CNY100 million. In H1 2020, Three
Squirrels recorded sales of CNY5.252 billion, up by 16.42% compared
with the same period of last year, with nuts contributing 54% of
total revenue. Nut sales grew by 11.4% while dried fruit saw a fall
of 9%. On sales channel, third party ecommerce accounted for 85%.
Offline sales continue to grow steadily. Impacted by Covid-19, the
company has slowed down the pace of new store opening. Its flagship
Feeding Store has 139 units, selling snacks and merchandising and
offering a place to interact with consumers. It has 478 franchised
stores. The company strengthened its logistics in H1 by building
more warehouses. Major competitors include Be & Cheery (PepsiCo
owned), Liangpin Puzhi (Bestore), Yilaifen, ChaCheer (Qiaqia),
Dahaoda (DHD) and Wolong. (IHS Markit Food and Agricultural
Commodities' Hope Lee)
Seoul Semiconductor has developed a next-generation Wafer
Integrated Chip on PCB (WICOP) Ultra High Luminance (UHL) Series
LED for vehicle headlamps, according to a company press release.
The company plans to begin mass production of the LED in 2021.
WICOP, a fundamental technology of the new product, is the world's
first patented package-less LED technology developed by Seoul
Semiconductor. Unlike flip chip technology, which must be bonded in
the semiconductor process, WICOP LEDs can be easily surface-mounted
in the general substrate bonding process. Mini-LEDs also use the
WICOP technology with a robust structure. The company has
emphasized that battery power consumption is one of the critical
factors that determine the range of an electric vehicle (EV). The
new LEDs help reduce headlamp power consumption by up to 20% for
EVs. They also offer an improvement in heat dissipation performance
of up to 40%, according to the company. The company claims that by
applying WICOP UHL technology to vehicle headlamps, the weight of
the lamp heat sink structure can be reduced by 75%. The new LEDs
also enable a slim headlamp design, thanks to an extremely small
LED-emitting area of the product. In September, Seoul Semiconductor
began supplying its WICOP Bi-color LED products for daytime running
lights (DRLs) and front turn signals for the model-year (MY) 2020
Audi A4 headlamp.(IHS Markit AutoIntelligence's Jamal Amir)
Keppel O&M, together with M1 Limited (M1) and other
partners, will introduce smart wearables from Samsung Electronics
to its workforce in its yards. This is inline with its digital
transformation plan to for its yard operations. The wearables are
not only capable of monitoring heart rates, they also come with
fall detection capability as well as providing real time positions
for immediate response should incidents occur. They are also
equipped with COVID-19 safe management features ensuring workers
operate in their assigned work zones. On the other hand, M1 will
provide high speed connectivity throughout the yards and reliable
real-time communication. M1, one of the major telecommunicating
service providers in Singapore, is jointly owned by Keppel
Corporation and Singapore Press Holdings (SPH). (IHS Markit
Upstream Costs and Technology's Jessica Goh)
DSME has developed an artificial intelligent hot-pressing
robot, Goknuri, for use in shipbuilding in its Okpo yard. Hot
pressing is used to make steel plate into curved surfaces at very
high temperature. The curved steel surfaces are used at the front
and rear of the hulls. According to DSME, the hot-pressing robot
can be operated by unskilled personnel who had undergone simple
training. (IHS Markit Upstream Costs and Technology's Jessica
Goh)
Vietnamese automaker VinFast has started testing its electric
bus on the internal road of its plant in Haiphong, reports the
Vietnam News Brief Service. VinFast's electric buses will be
operated by VinBus Ecology Transport Services LLC, which was
established by Vingroup, VinFast's parent company, in 2019 with
registered capital of VND1 trillion (USD43.1 million). VinBus will
launch its own mobile app to combine with VinID to provide
customers with information on the bus network, aiming to help
passengers look up optimal route information. In the first phase,
VinBus will run 150-200 electric buses in Hanoi, Ho Chi Minh City,
and Phu Quoc Island. The Vietnamese Ministry of Transport, in its
documents to the People's Committees in Hanoi and Ho Chi Minh City,
agreed with Vingroup's proposal on the implementation of electric
bus routes to reduce environmental pollution. VinFast, a new
entrant in the car manufacturing segment, aims to produce 500,000
cars a year by 2025, with a local content rate of 60%. VinFast also
aims to be one of the top car manufacturers in the Southeast Asian
region by 2025. In June 2019, the automaker began deliveries of its
Fadil hatchback and in August it started deliveries of its two
luxury models - the LUX A2.0 sedan and LUX SA2.0 sport utility
vehicle (SUV). VinFast has partnered with world-leading automotive
technology and manufacturing consulting firms such as BMW, Magna
Steyr, and AVL. It has also signed agreements with companies such
as Pininfarina, Siemens, Bosch, Torino Design, Italdesign, Zagato,
and the German Chamber of Commerce and Industry to develop
products. The latest development is in line with the automaker's
plan to introduce two electric passenger vehicles, one electric
bus, and four e-scooters. (IHS Markit AutoIntelligence's Jamal
Amir)
Posted 21 October 2020 by Chris Fenske, Head of Fixed Income Research, Americas
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