Macro Economy
1. The purchasing managers’ index (PMI) for the manufacturing sector was 49.2 percent in October, down 0.9 percentage points from the previous month and below the critical point. In terms of enterprise size, the PMI of large enterprises was 50.1%, down 1.0 percentage points from the previous month and still above the critical point. The PMI of medium and small enterprises was 48.9 percent and 48.2 percent, respectively, down 0.8 and 0.1 percentage points from the previous month, continuing to remain below critical point.
Industry Information
1. National Energy Administration: “In the first three quarters of 2022, China’s newly installed renewable energy capacity was 90.36 million kW, accounting for 78.8% of the country’s newly installed power generation capacity.” Of this total, hydro power increased by 15.9 million kW, wind power by 19.4 million kW, photovoltaic power by 52.6 million kW and biomass power by 2.62 million kW, accounting for 13.9 percent, 16.8 percent, 45.8 percent and 2.3 percent, respectively.
2. Henan Provincial Development and Reform Commission: Industrial and commercial power users are encouraged to reduce the electricity load in peak hours and increase the electricity consumption in off-peak hours by configuring energy storage and carrying out comprehensive energy utilization and reduce the electricity cost by changing the electricity consumption time. The price of peak segment will rise by 64% based on flat segment price, and the price of valley segment will rise by 59% based on flat segment price.
News of Corporates
1. From the middle of 2023, BMW Shenyang production base will gradually use Hegang steel’s low-carbon automobile steel. The production of these “steels” produces 10 to 30 percent less carbon dioxide than conventional steel. From 2026, BMW Shenyang production base began to use green automotive steel (“green steel” for short) produced by Hegang steel in the mass production process of complete vehicles. The “green steel” is based on processes such as green electricity and electric furnaces, which will gradually reduce carbon dioxide emissions by 95 percent. Under current procurement plans, it is expected to reduce CO2 emissions by about 230,000 tons per year from 2026.
2. Weiqiao Group holds a ground-breaking ceremony for its Shenzhen headquarters project in the central district of Baoan on Nov 13. The headquarters in Shenzhen will focus on industries related to the layout of intelligent network automobile, digital industry, intelligent terminal and intelligent sensor, new energy and new materials and other fields.
Logistics
- As demand continues to weaken, sea freight rates continue their downward trend. The decline in spot rates on the US-West route has narrowed, but the decline in rates on the European and US-east routes is widening. Last week, shipping rates between Shanghai and Europe fell below $1,500 per TEU. The freight rate (sea freight and Marine surcharge) for exports from Shanghai port to European basic port market was US $1478 /TEU, down 16.2% from the previous period. Mediterranean freight fell 7.2% to $2,061 per TEU. The U.S. -Western freight rate fell 2.9% weekly to $1,632 /FEU. Eastbound freight rates fell 13.6% to $4,223 per FEU.
- Alphaliner TOP 100 / 15th November, 2022
Others
1. U.S. industrial aluminum imports totaled 13,569 tons in September, down 2.86 percent from 13,968 tons in August. Among them, imports from Canada rose 4.01 percent to 10,150 tons from 9,759 tons in August. Imports from Mexico fell 20.74 percent to 3,202 tons from 4,040 tons in August.
2. On 12th Nov., based on the responses received, the LME concluded that most market participants still planned to continue purchasing Russian metals in 2023. As a result, the LME does not recommend banning deliveries of Russian metals or imposing thresholds on Russian stocks currently.
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Yours sincerely,
LODEC SHANGHAI TEAM