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Equity markets closed higher across the globe alongside other
risk assets, as further improvement in US presidential candidate
Joe Biden's poll numbers in key battleground states may be
potentially dampening some of the uncertainty going into next
month's presidential election. Brent/WTI closed sharply higher, but
prices still remain below this summer's peak levels. European
government bonds closed modestly lower and 10yr US government bonds
had their worst day since mid-March on the switch to a risk-on
sentiment. iTraxx and CDX indices closed tighter across IG and high
yield. The US dollar closed lower, while gold and silver were
higher on the day.
Americas
President Trump left Walter Reed National Military Medical
Center with a cautious prognosis Monday after three days of
treatment for COVID-19, returning to a White House roiled by the
spread of the contagion among his top aides a month before he seeks
re-election. (WSJ)
US equity markets closed sharply higher today; Russell 2000
+2.8%, Nasdaq +2.3%, S&P 500 +1.8%, and DJIA +1.7%.
10yr US govt bonds closed +9bps/0.79% yield and 30yr bonds
+10bps/1.59% yield. Today is the fifth largest selloff (based on
increase in yield) in 10yr bonds this year and the most since 18
March when 10s closed +10bps.
CDX-NAIG closed -3bps/57bps and CDX-NAHY -17bps/388bps.
DXY US dollar index closed -0.5%/93.40.
Gold closed +0.7%/$1,920 per ounce and silver +2.2%/$24.56 per
ounce.
Crude oil closed +5.9%/$39.22 per barrel, which is 9.6% below
this summer's peak level.
The seasonally adjusted final IHS Markit US Services PMI
Business Activity Index registered 54.6 in September, down slightly
from 55.0 in August, but matching the earlier released 'flash'
estimate. The solid rise in business activity was commonly linked
to stronger demand conditions. The rate of growth was the
second-fastest since March 2019 and solid overall despite softening
from that seen in August. In line with greater new business
inflows, firms increased their workforce numbers in September. The
rate of job creation was strong overall and the second-quickest
since February 2019, as many firms stated that insufficient
capacity to process new orders had driven hiring. At the same time,
backlogs of work rose for the third month running and at a solid
pace. (IHS Markit Economist Chris Williamson)
Tesla has announced its global production and delivery figures
for the third quarter, with 139,300 vehicles delivered and 145,036
vehicles produced. In its brief statement, Tesla also reported that
its new-vehicle inventory declined further during the period, "as
we continue to improve our delivery efficiency". Of the totals,
Tesla delivered a combined 15,200 Model S and Model X vehicles and
produced 16,992 units. The combined total of Model 3 and Model Y
vehicles delivered was 124,100 units, with 128,044 units produced.
Tesla provided only a snapshot of its deliveries and production in
the third quarter and did not break down the figures by country or
region. Further details will come with the company's reporting of
its third-quarter financial results later this month. The
production and delivery figures represent a sharp increase from
third quarter 2019, as production at Tesla's Chinese factory is
being ramped up and sales of the Model Y have begun. In the second
quarter of 2020, Tesla delivered 90,650 vehicles and produced
82,272 vehicles, although the figures were affected by COVID-19
pandemic-related shutdowns. Tesla's current growth is a result of
increased production capacity and additional model lines. (IHS
Markit AutoIntelligence's Stephanie Brinley)
Caterpillar has signed an agreement to acquire the Oil &
Gas Division (Weir Oil & Gas) of the Weir Group, a
Scotland-based global engineering business. Headquartered near Fort
Worth, Texas, Weir Oil & Gas produces a full line of pumps,
flow iron, consumable parts, wellhead and pressure control products
that are serviced via an extensive global network of service
centers located near customer operations. The acquisition will
expand Caterpillar's offerings in the well service industry.
Caterpillar will combine Weir Oil & Gas's pressure pumping and
pressure control portfolio with its engines and transmissions
business. The purchase price of USD405 million is to be paid in
cash at closing. The acquisition requires approval by Weir
shareholders and is subject to review by various regulatory
authorities as well as customary closing conditions. The
transaction includes more than 40 Weir Oil & Gas manufacturing
and services locations and approximately 2,000 employees. In
February 2020, the Weir Group announced its intention to sell the
Oil & Gas division to become a pure play mining technology
provider. (IHS Markit Upstream Costs and Technology's Kamila
Langklep)
Uber's logistics arm, Uber Freight, has raised USD500 million
in funding from private equity firm Greenbriar Equity Group,
reports Reuters. The company will use the infused capital to scale
its logistics platform and increase product innovation. Uber
Freight is valued at USD3.3 billion on a post-money basis and will
see Michael Weiss and Jill Raker, managing partners of Greenbriar,
joining its board. Uber Freight was launched in May 2017 as a
service that matches truckers with companies needing cargo to be
shipped across the United States. In 2018, Uber announced that it
would spin off its long-haul trucking business, Uber Freight, into
a standalone business unit (see United States: 8 August 2018: Uber
spins off freight business, co-founder returns to lead new entity).
In 2019, Uber Freight announced its expansion into Europe and that
it was moving its headquarters to Chicago (US), with plans to
nearly double the unit's workforce. (IHS Markit Automotive
Mobility's Surabhi Rajpal)
The US Canola Association has asked the Environmental
Protection Agency (EPA) to approve the oilseed as a source of
renewable fuel, which could feed an expected surge in demand for
raw material from processing plants being developed. In March, the
group submitted a pathway petition to EPA to add canola renewable
diesel as an eligible renewable fuel standards product, said Tom
Hance, Washington Representative for the US Canola Association. The
petition is not yet publicly available and is under EPA review,
according to Hance. If approved, demand for the oilseed—and
potentially its price—could rise and spur more imports from
Canada. It could double the amount of Canada's crop that goes into
fuel production, according to the Canola Council of Canada. (IHS
Markit Food and Agricultural Policy's Richard Morrison)
The agrochemical market in Brazil for "product on the ground"
was flat during the first half of the year, inching up barely 0.2%
to $6,040 million, the crop protection industry trade association,
Sindiveg reports. The data does not reflect the total number of
products sold, as some of these products are not actually used by
growers, the association explains. The cumulative area treated
(PAT) with various agrochemicals rose by 6% to 643.2 million ha.
PAT calculates the volume use by treated area. It was up by 7.3% in
the first three months of this year. Insecticides accounted for 36%
of the surveyed agrochemicals, fungicides some 33% and herbicides,
22%. Soybeans accounted for almost a third of the treated area
(33%) at 224.9 million ha, compared with 32% during last year's
first six months. Maize constituted some 29% of the treated area
(28% in the same period last year) at 200.2 million ha, and cotton
18% (19%). The next major crops included sugarcane, wheat, fruits
and vegetables, beans, coffee and citrus fruits. The Sindiveg
reports increased use of fungicides and insecticides on the three
main crops. Fungicide application rose on soybeans to control
anthracnose, target leaf spot (Corynespora cassiicola) and Asian
soybean rust (Phakopsora pachyrhizi). Insecticide applications on
the crop were up for the control of stink bugs (Pentatomidae spp).
The use of fungicides was up on maize to combat leaf diseases and
rust, and applications of insecticides rose for the control of
stink bugs and leafhoppers (Dalbulus maidis). Applications of
fungicides were also up for grey mildew (Ramularia aréola) control
on cotton, and that of insecticides for the control of boll weevils
(Anthonomus grandis) on the crop. The association says that pest
and disease pressure was greater than ever in the first half of
this year. On soybeans, it stressed the particular challenges of
Asian soybean rust, while noting that stink bugs were the principal
pest. Sourgrass (Digitaria insularis) and flaxleaf (Conyza
bonariensis) provided the main weed concerns for the crop, which
demanded different modes of action to control them. (IHS Markit
Crop Science's Robert Birkett)
Colombian bank Banco GNB Sudameris cancelled on 1 October a
planned bond sale and repurchase of its 2022 notes. The institution
- the seventh-largest bank by assets in Colombia - withdrew a
tender offer announced on 18 September to repurchase its 7.5%
subordinated notes due in 2022 and refinance this with a new
10-year bond with a target yield in the mid-to-high 8% area. A
report by Latin Finance cited a source who commented that few
bondholders had wished to redeem the existing debt, and reports
stated that investors had demanded a coupon of over 9%. (IHS Markit
Banking Risk's Alejandro Duran-Carrete and Brian Lawson)
The high yields reportedly sought on the bank's debt appear
atypical versus other recent bank issuances in other regions and
are also considerably higher than on the largest (top three)
Colombian banks.
Investor sentiment towards emerging-market risk has been mixed
in recent weeks, amid concerns over the evolution of the COVID-19
pandemic and the potential trajectory of the global economy.
At sovereign level, Bahrain and Egypt have enjoyed clear market
success despite facing elements of debt or external stress.
However, GNB Sudameris is one of three Latin American borrowers
that have withdrawn bond sales recently.
Brazilian oil and gas firm Petro Rio withdrew its planned
USD450-million five-year deal, citing oil market uncertainties and
recent price volatility. In a CVM filing statement on 17 September,
it described conditions as "unfavorable".
On 2 October, Brazilian outsourcing company Atento also
withdrew a planned bond sale and repurchase of existing debt,
planning to review the situation again "once market conditions
stabilize".
The market's price sensitivity to GNB does not appear
credit-driven. GNB does not display significantly greater risk than
the overall Colombian banking sector.
In July, GNB Colombia had a non-performing loan (NPL) ratio of
1.2% versus the sector average of 3.2%. Moreover, its
profitability, as measured by the return on assets (ROA) ratio,
stood at 0.79% versus 0.83% for the sector. GNB's capitalisation as
measured by the capital-adequacy ratio and Tier 1 ratio stood at
healthy levels of 19.7% and 11.6%, respectively, compared with the
15.5% and 11.2% average for Colombian banks.
Colombian sovereign debt appears supportive of banking-sector
credit fundamentals. IHS Markit economists have highlighted
recently that Colombian sovereign debt is likely to retain an
investment grade rating and should not face substantial funding
issues.
President Nicolás Maduro will introduce the "anti-blockade"
bill in the week starting on 5 October at the National Constituent
Assembly; the bill grants the government powers to change property
ownership, as well as the management of state-owned companies and
mixed companies (joint ventures). The draft legislation would
permit more foreign direct investment in Venezuela's strategic
economic sectors, including in the oil sector, where key projects
are currently controlled by the national oil company Petróleos de
Venezuela (PDVSA). The Hydrocarbons Law mandates that PDVSA
controls 50.1% of shares and that the operation of oil projects
with foreign companies is capped at 49.9%. The bill also allows
expropriated companies to be returned to their original owners or
privatized. The pro-government National Constituent Assembly is the
de facto legislature in Venezuela as the internationally recognized
opposition-controlled national assembly is deemed as null and void
by Maduro and the Supreme Court. The anti-blockade bill is very
likely to become effective this week, as soon as it is approved by
the National Constituent Assembly, attracting interest from
Russian, Chinese, and Iranian state-owned companies, and Turkish
and Indian investors, to control 100% of shares and operations in
oil projects. These investors would also be interested in assuming
control of key mining and other industries that were subject to
expropriations. The bill is unlikely, however, to attract interest
from established Western companies over fears of breaching US
sanctions, and President Maduro's government lacks the capacity to
provide guarantees for investors and resume the business operations
of expropriated assets. (IHS Markit Country Risk's Diego
Moya-Ocampos)
According to the Central Bank of Honduras (Banco Central de
Honduras: BCH), the Honduran economy contracted by 18.5% year on
year (y/y) in the second quarter of 2020, driven by contractions in
all major sectors of the economy. Based on this significant GDP
contraction and expectations of a slow recovery, IHS Markit is
likely to revise down its 2020 GDP forecast during the November
forecasting round. (IHS Markit Economist Lindsay Jagla)
Recently published data by the BCH show that second-quarter GDP
declined by 18.5% y/y. In quarterly terms, the economy contracted
by 17.6%, after declining by 2.2% in the first quarter this
year.
The spread of the coronavirus disease 2019 (COVID-19) virus and
subsequent social-distancing measures have paralyzed the economy,
lowering internal and external demands. Global economic contraction
- especially in the United States - has lowered demand for Honduran
exports, which declined by 41.7% quarter on quarter (q/q), and
contributed to a 13.2% decline in investment.
A combination of lower disposable income, stricter curfews and
restrictions, and fewer remittances contributed to low internal
demand. This, in turn affected consumption, which fell by 14.1%, as
well as imports, which dropped by 31.3%.
Nearly all economic sectors contracted in the second quarter,
but the overall decline was driven by q/q contractions in
manufacturing (-30.8%); retail, hotels, and restaurants (-29.3%);
financial services (-9.8%); construction (-50.1%); and
transportation and storage services (-37.4%). Measures to combat
the COVID-19 virus have resulted in restrictions that halted the
tourism industry, prevented companies and factories from operating
at full capacity, and generally slowed all economic activity.
The only sectors that gained quarterly growth were utilities
(+0.5%), communications (+0.1%), and public administration and
defense (+0.2%); however, these had no significant impact on the
final GDP figure.
The country's second-quarter data were in line with our
expectations that this quarter would be the worst for Honduras this
year because of strict social-distancing measures and economic
shutdown, domestically and abroad. We expect Honduras to mark
quarterly improvements starting in the third quarter, but the
country will still face significant overall GDP contraction in
2020.
Europe/Middle East/Africa
European equity markets closed higher; Spain +1.2%,
Italy/Germany +1.1%, France +1.0%, and UK +0.7%.
10yr European govt bonds closed lower across the region; UK
+4bps, Germany/Spain +3bps, France +2bps, and Italy +1bp.
iTraxx-Europe closed -1bp/57bps and iTraxx-Xover
-8bps/333bps.
Brent crude closed +5.1%/$41.29 per barrel.
The eurozone's economic recovery ground almost to a halt in
September, as a renewed fall in service sector activity countered
faster manufacturing growth. The IHS Markit Composite PMI output
index, a GDP-weighted average of the manufacturing and service
sector survey gauges, fell from 51.9 in August to 50.4, signalling
only a mild increase in business activity. While the survey
continues to indicate that the economy rebounded strongly over the
third quarter as a whole, thanks to a strong surge at the start of
the quarter (after business activity contracted sharply during the
height of the Covid-19 pandemic in the second quarter), the rebound
lost almost all of its momentum as the third quarter progressed. As
such, the survey indicates an increased risk of the economy sliding
back into contraction in the fourth quarter. Our baseline forecast
is for the eurozone economy to continue to grow in the fourth
quarter, but with the eurozone economy having already almost
stalled in September, the chances of a renewed downturn in the
fourth quarter have clearly risen. Much will depend on whether
second waves of virus infections can be controlled, and whether
social distancing restrictions can therefore be loosened to allow
service sector activity to pick up again. Governments will also
need to be vigilant in providing timely support to sustain
recoveries, alongside increasingly accommodative monetary policy.
In terms of the latter, inflationary pressures remained low in
September, keeping the door open for loose policy. Average prices
charged for goods and services fell for a seventh straight month in
September, according to the PMI survey, with the rate of deflation
gathering pace again after easing in the prior four months.
Expectations have risen for more asset purchases to be sanctioned
by the ECB's governing council by the end of the year, and any
further deterioration of the PMI numbers as we head into the fourth
quarter will add further weight to calls for more stimulus. (IHS
Markit Economist Chris Williamson)
Tesla has agreed a deal to buy the German company, ATW
Automation, which assembles battery modules for the automotive
industry, according to a Bloomberg report. ATW is a subsidiary of
Canadian ATS Automation Tooling Systems Inc. On 25 September, ATS
announced that that certain assets and employees at one of its
Germany-based units would be sold and transferred to a third party,
without disclosing the name of the company. German publications The
European and WirtschaftsKurier first reported the planned
acquisition, although neither ATS or Tesla have confirmed it. ATW,
based in western Germany, has about 120 employees and has completed
more than 20 battery production lines for international automakers.
Given Tesla's investment in a new plant site in Brandenburg which
is near the site of Berlin's new airport, such an acquisition would
make a great deal of strategic sense. (IHS Markit
AutoIntelligence's Tim Urquhart)
Passenger car registrations in the UK have fallen by 4.4% year
on year (y/y) during the important high-volume month of September.
According to the Society of Motor Manufacturers and Traders (SMMT),
demand has fallen from 343,255 units to 328,041 units. (IHS Markit
AutoIntelligence's Ian Fletcher)
This makes it the weakest 'new plate' September ever, according
to trade association. There were declines across all customer
types. Private demand dipped by 1.1% y/y to 161,363 units, while
fleet registrations contracted by 5.8% y/y to 159,081 units.
Registrations by business customers also dropped by 31.9% y/y to
7,597 units.
Fuel-type data during September also highlighted shifts in
consumer preference. Gasoline (petrol)-engine passenger car
registrations dropped by 20.9% y/y to 176,532 units, and diesel
plummeted by 38.4% y/y to 46,996 units.
The shift is partly explained by mild-hybrid (MHEV) becoming a
more prevalent technology, with diesel MHEVs having increased 66.4%
y/y to 13,484 units and gasoline MHEVs expanding by 422.1% y/y to
30,382 units.
Other customers are making a more conscious move in the
direction of alternative powertrain technologies. Traditional
hybrids have risen 55.8% y/y to 26,344 units, and an even bigger
percentage increase has gone to plug-in hybrids (PHEVs) which
jumped 138,6% y/y to 12,400 units.
Battery electric vehicles (BEVs) have also risen by 184.3% y/y
to 21,903 units. Nevertheless, the collective market share of these
three types remains in single figures.
Ford was again the leading brand in September with volumes of
28,252 units, although this was a decline of 13.1% y/y.
Second place in the brand chart last month was Volkswagen (VW)
with 27,328 units registered, which was a leap of 39.2% y/y.
It was a mixed month for the German premium brands, which
occupied the following three positions. Mercedes led the way in
terms of registrations, with its 23,522 units taking it to third.
Another faller this month was BMW in fifth which registered 21,225
units, a fall of 23.7% y/y; none of its models entered the top-10
chart this month. Audi split the two brands; due to its low base of
comparison a year ago, its registrations surged by 71.8% y/y to
21,893 units, although none of its vehicles appeared in the top-10
model chart either.
Looking forward, IHS Markit passenger car registrations will
suffer a huge drop during 2020, with demand expected to have fallen
by 26.9% y/y to 1.69 million. Although we expect volumes will start
to move towards earlier levels during 2021, this will only stand at
around 2.02 million units, well below the 2.31 million units
recorded in 2019, which itself was well below a previous peak
recorded in the middle of the previous decade. This is also based
upon the UK finally reaching an agreement with the EU on a trade
deal and the expectation that there will be no restrictions placed
on movement.
Italy's national statistical office (ISTAT) reports that the
impact of the COVID-19-virus pandemic was more severe on the
economy during the second quarter of 2020 than initially reported.
The national lockdown and the social-distancing measures mothballed
the hotel and restaurant, and the travel and transport sectors, and
recreational, cultural, and personal services from 11 March. ISTAT
estimates that the Italian economy slumped by 13.0% quarter on
quarter (q/q) in the second quarter, revised from the previously
reported drops of 12.8% q/q in the second release and 12.4% q/q in
the first estimate. (IHS Markit Economist Raj Badiani)
In annual terms, the economy contracted by 18.0% year on year
(y/y) and 5.6% y/y in the second and first quarters,
respectively.
This is in line with our second-quarter assessment prior to the
official releases when we estimated that real GDP shrank by 13.0%
q/q and 17.8% year on year (y/y).
In addition, it implies that Italy remained in technical
recession (defined as two successive quarters of q/q decline)
during the second quarter after it contracted by 5.5% q/q in early
2020 and 0.2% q/q in the fourth quarter of 2019.
A breakdown by expenditure reveals that domestic demand
subtracted 9.6 percentage points from the GDP change between the
first and second quarters, with private consumption and fixed
investment each representing drags of 6.8 and 2.9 percentage
points, respectively.
Net exports also made a negative contribution of 2.3 percentage
point, with exports falling more sharply than imports.
A change in inventories was also a drag on the second-quarter
GDP change, signifying a subtraction of 1.2 percentage point.
Consumer spending bore the brunt of tumbling Italian activity
during the second quarter. Specifically, it contracted by 11.4% q/q
and was 17.3% smaller than a year earlier in the second
quarter.
In addition, the household economy endured a sharp fall in its
gross disposable income in real terms, which fell by 5.8% q/q.
With the national lockdown curtailing the ability of households
to spend, the personal savings ratio rose to a record 18.6% of
disposable income in the second quarter, up from 13.3% in the first
quarter.
Meanwhile, fixed investment fell acutely, at 16.2% q/q and
22.6% y/y in the second quarter, with spending on machinery and
equipment, dwellings and residential structures heavily
curtailed.
Third-quarter growth stood at an estimated 6.6% q/q, but some
high-frequency data hinted at a loss of momentum after initial
surge in activity.
Atlantique Offshore Energy has commenced fabrication of the
electrical substations for the Fécamp wind farm, offshore France.
First steel cut took place on 30 September 2020 at Chantiers de
l'Atlantique's shipyard in Saint-Nazaire, France. At the start of
the year, a consortium formed by Enbridge, EDF Renewables and wdp
Offshore granted Atlantique Offshore Energy, GE Grid Solutions and
SDI a contract to supply the wind farm's substations. Atlantique
Offshore Energy is in charge of designing, manufacturing and
commissioning the topside and jacket foundation, GE Grid Solutions
is in charge of designing, manufacturing and commissioning high and
medium voltage electrical equipment and protection control systems,
while SDI will carry out the transport and installation. Delivery
of the substation is scheduled for 2022. The Fécamp wind farm will
comprise 71 Siemens Gamesa 7 MW turbines, located between 13 and
22km off the northwest of France. Commissioning of the 500 MW
project is scheduled for 2023. (IHS Markit Upstream Costs and
Technology's Jie Sheng Aw)
Construction of Equinor's Hywind Tampen offshore floating wind
farm in Norway has commenced. The wind project will provide power
to the Snorre and Gullfaks projects via 11 x 8MW wind turbines with
a total capacity of 88 MW. The wind turbines are anticipated to
meet about 35% of the annual power demand of the projects' five
platforms, Snorre A and B and Gullfaks A, B and C. The wind farm
will be located between the Snorre and Gullfaks platforms in water
depths of 260 to 300 m, 140 km from shore. The project aims to
reduce Co2 emissions by more than 200,000 metric tons per year by
reducing the use of gas turbines on the fields. Total investment
will be close to NOK 5 billion (USD 486 million). (IHS Markit
Upstream Costs and Technology's Jie Sheng Aw)
Sales in the Turkish passenger car and light commercial vehicle
(LCV) markets increased by 115.8% year on year (y/y) to 90,619
units in September, according to data released by the Automotive
Distributors Association (Otomotiv Distribütörleri Derneği: ODD).
(IHS Markit AutoIntelligence's Nitin Budhiraja)
Of this total, passenger vehicle sales were up by 101.9% y/y to
71,296 units during the month, while LCV sales stood at 19,323
units, up by 189.1% y/y.
The country's light-vehicle market posted a year-to-date (YTD)
increase of 75.5% y/y to 493,621 units, comprising 388,690
passenger vehicles, up by 70.0% y/y, and 104,931 LCVs, up by 99.2%
y/y.
In the YTD, C-segment vehicles accounted for 63.2% of total
passenger vehicle sales in Turkey, with sedans being the most
preferred vehicle type, accounting for 43.9%.
In the LCV segment, vans accounted for 76.8% of total sales in
the YTD, followed by light trucks at 11.0%.
The significant y/y sales growth in Turkey during September can
be attributed to the low base of comparison and easing of lockdown
restrictions.
Asia-Pacific
APAC equity markets closed higher across the region; Australia
+2.6%, Hong Kong +1.3%, south Korea +1.3%, Japan +1.2%, and India
+0.7%.
Honda has announced that it has decided to withdraw from the
FIA Formula One (F1) world championship as an engine supplier at
the end of the 2021 season, according to a company statement. This
means that the OEM will conclude its supply contracts with the Red
Bull and Alpha Tauri Formula One teams to provide engines at the
end of next season. Instead the company will refocus the resources
committed to its Formula One engine program, including some of its
brightest and focused engineers and designers on battery electric
vehicles (BEVs) and fuel cell development. In its statement Honda
said, "Toward this end, Honda needs to funnel its corporate
resources in research and development into the areas of future
power unit and energy technologies, including fuel cell vehicle
(FCV) and battery EV (BEV) technologies, which will be the core of
carbon-free technologies. As a part of this move, in April of this
year, Honda created a new center called Innovative Research
Excellence, Power Unit & Energy. Honda will allocate its energy
management and fuel technologies as well as knowledge amassed
through F1 activities to this area of power unit and energy
technologies and take initiatives while focusing on the future
realization of carbon neutrality. Toward this end, Honda made the
decision to conclude its participation in F1." While the decision
took the F1 community by surprise, and not least Red Bull Racing
and Red Bull's second team Alpha Tauri, which currently have
contracts to run Honda engines and which were working on the
assumption that this would be a long-term relationship, it is not
as surprising to anyone who understands the current dominant
dynamics of the global automotive industry. The industry is facing
unprecedented cost pressures, with the twin tests of the move
towards electrification and increasing investment in digital
architectures including the move towards autonomous vehicle
technology, all the while facing the threat of potential industry
disruptors from the tech industry who are sitting on huge cash
piles, something traditional OEMs do not have access to. (IHS
Markit AutoIntelligence's Tim Urquhart)
Ramboll has been contracted by China Steel Power Corporation to
design the jacket foundation for the Zhong Neng offshore windfarm
in Taiwan. The 300MW project is 20km off the west coast of Changhua
County. The project is co-developed by China Steel Corporation
(CSC) and Copenhagen Infrastructure Partners (CIP) and is scheduled
for completion in 2024. Ramboll will provide the conceptual, FEED,
and detailed designs for the primary and secondary structure of the
jacket foundations, piles, and transition pieces, among other
things. Ramboll also provided the engineering for CIP's Chang Fang
and Xidao offshore wind farms' jacket foundations. (IHS Markit
Upstream Costs and Technology's Jie Sheng Aw)
New vehicle sales in Australia decreased by 21.8% year on year
(y/y) to 68,985 units during September, according to data from the
Federal Chamber of Automotive Industries (FCAI). (IHS Markit
AutoIntelligence's Nitin Budhiraja)
The sport utility vehicle (SUV) segment posted a sales decline
of 22.0% y/y to 32,647 units, while passenger car sales fell
steeply to 17,720 units, down by 28.8% y/y.
In September, sales of light commercial vehicles (LCVs) totaled
15,772 units, down by 13.6% y/y, while heavy commercial vehicle
(HCV) sales were 2,846 units, down 10.2% y/y.
During the month, Toyota was the best-selling brand with sales
of 12,936 units. In second place was Mazda with sales of 7,000
units, followed by Hyundai with 5,273 units, Kia with 5,092units,
and Ford with 4,816 units.
The top-selling vehicle was the Ford Ranger with sales of 3,726
units, Toyota Hilux (3,610 units), Toyota RAV 4 (2,433) and Hyundai
i30 (1,786 units).
The state of Victoria, which is currently under Stage 4
Restrictions, recorded a 57.7% y/y decrease in sales to 10,447
units last month.
FCAI chief executive Tony Weber anticipates, the industry to
see an increasingly positive trend as barriers to purchase are
eased and consumer confidence returns.
On a year-to-date (YTD) basis, sales were down by 20.5% y/y to
644,891 units.
Although the Australian new vehicle sales in September improved
compared to August, it is are still under pressure due to market
forces. It seemed as if the COVID-19 pandemic was under control and
fading away in Australia until early June, but there was another
wave of fresh cases towards the end of the month, which led to some
states reimposing restrictions on gatherings.
Petrofac has been awarded a FEED contract for the Infinite Blue
Energy Group's (IBE) Arrowsmith Hydrogen Project in Australia.
Petrofac's scope of work includes reviewing the conceptual work
carried out on the project to date and the execution of the FEED
study. This will be undertaken by Petrofac's teams in Perth,
Australia and Woking, England. Located in Western Australia, the
Arrowsmith Hydrogen Project is expected to commence production by
the end of 2022 and will generate 25 tons of green hydrogen per day
from water, solar and wind. The contract represents a significant
strategic step in Petrofac's continued expansion into renewable
energy and quickly follows its recently announced award for the
Acorn Carbon Capture and Storage (CCS) and hydrogen project in the
United Kingdom. (IHS Markit Upstream Costs and Technology's William
Cunningham)
The global electric vehicle (EV) sales of Hyundai Motor Group,
including affiliate Kia, increased 25% year on year (y/y) to around
60,707 units during January-July, reports the Yonhap News Agency,
citing data released by the Korea Automotive Technology Institute.
This means the South Korean automotive group emerged as the world's
fourth-largest player in terms of global EV sales during the
period. (IHS Markit AutoIntelligence's Jamal Amir)
Tesla topped the list by selling 191,971 units over the
seven-month period, up 4% y/y, trailed by Renault-Nissan with
86,189 units, down 5% y/y.
Volkswagen followed in third place with EV sales of 75,228
units, more than double y/y over the period.
China-based BYD chased Hyundai Motor Group by selling 42,340
units during the period, although its EV sales plunged 63%
y/y.
The report also highlights that Hyundai Motor Group became the
top player in the fuel-cell electric vehicle (FCEV) segment in
January-July by selling 2,879 units, up nearly 60% y/y.
Toyota followed in the rankings by selling 439 FCEVs during the
period, up 71% y/y. The surge in Hyundai Motor Group's global EV
sales reflects the growing demand for such vehicles globally.
Various governments around the world are preparing to phase out
the use of gasoline (petrol)- and diesel-powered vehicles in their
fight against pollution and are providing incentives to increase
the adoption of alternative-powertrain vehicles. Hyundai Motor
Group aims to become a global leader in the field of electrified
mobility. It aims to capture 10% of the global EV market by selling
1 million EVs by 2025. In a bid to achieve this goal, the automaker
intends to invest more in future mobility and introduce more EV
models.
Posted 05 October 2020 by Chris Fenske, Head of Capital Markets Research, Global Markets Group, S&P Global Market Intelligence
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This article was published by S&P Global Market Intelligence and not by S&P Global Ratings, which is a separately managed division of S&P Global.
