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BP boosts Britain before Brexit breather; iPhone 11 arrives

The Supply Chain Daily provides a curated overview of Panjiva's research and insights covering global trade policy, the logistics sector and industrial supply chains and draws from global shipping and freight data.

BP, Shell provide temporary boost to UK exports
While the likelihood of a no-deal Brexit on Oct. 31 has decreased, it hasn’t disappeared altogether and long-term planning uncertainties for supply chains remain.

British international merchandise trade activity rose 2.5% year over year in July, although trade with the EU was down, with exports falling 3.8% and imports 1.5%. The growth in July was led by a 75.8% jump in exports to China, thanks largely to crude oil and power generating equipment, as well as a 21.6% improvement in shipments to the U.S.

The latter included a 98.1% rise in shipments of pharmaceuticals along with increases of 191.1% in crude oil exports and a 21.7% rise in automotive exports in dollar terms. Shipments of both pharmaceuticals and autos could be at risk amid any potential changes to the Trump administration's healthcare and national security policies later in 2019.

Exports of crude oil meanwhile may already have dipped 14.8% year over year in August in tonnage terms. Panjiva’s seaborne shipping data indicates that the largest shipper of crude oil to the U.S. from the U.K. in the 12 months to Aug. 31 was likely BP p.l.c., with shipments equivalent to 30.8% of the total associated with the U.K.-based company. That was followed by Royal Dutch Shell PLC, with 17.4%, and EnQuest PLC, with 8.7%, though shipments associated with either do not appear to have arrived in August, according to the data.

(Panjiva Research - Policy)

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iPhone 11 arrives as as U.S. phone imports rise, tariffs loom
Apple Inc.'s latest phone launch — the iPhone 11 has come with a lower-than-expected price point and new trade-in scheme. While U.S. imports of phones in July climbed 7.1% year over year and 3.9% year to date, it follows an 8.9% year-over-year slide in 2018 preceded by three previous years of declines.

With 77.6% of all U.S. phone imports coming from China, the U.S. government's imposition of 15% import tariffs from Dec. 15 may be an issue for Apple and other phone makers. Price increases may be an early response and would follow a 4.1% year-over-year rise in the average U.S. import value per handset to $264 for all suppliers in the 12 months to July 31.

(Panjiva Research - Tech. Hardware)

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Lackluster US import growth balances consumer growth, weaker industrial demand
U.S. seaborne import growth continued to decelerate in August with imports of both containerized and non-containerized freight increasing just 0.1% year over year. A tariff-related 1.8% drop in imports from China was offset by a 9.1% rise in imports from Asia, excluding China. The latter was led by a 27.3% jump in imports from Vietnam.

Supplies of many consumer products remained strong ahead of new tariffs on Chinese exports on Sept. 1 and Dec. 15. Imports of apparel and toys rose 6.6% and 14.8% respectively in August. A fourth straight year-over-year decline in imports of furniture, of 1.9%, indicates that the tariffs can take a toll on demand.

Industrial demand for imports also appear to be continuing to weaken. Imports of steel and chemicals fell 6.2% and 11.4%, respectively

(Panjiva Research - Economics)

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Giant shifts to a higher gear as tariff costs rise
The bicycle manufacturing industry is facing a variety of challenges from U.S. tariffs on Chinese exports. Guardian Bikes’ CEO, Brian Riley, recently cited cash-flow planning as the biggest challenge and said that adapting supply chains is a multiyear and multimillion-dollar prospect. Tariffs on Chinese exports may already be suppressing demand after being implemented at 10% in Sept. 2018, rising to 25% in May 2019 and potentially to 30% from Oct. 1.

Total U.S. imports of bicycles fell 2.0% year over year in July, after a 9.6% slide in the second quarter of 2019, as a result of an 18.2% drop in shipments from China being partly offset by increased imports from Taiwan. Among the major U.S. importers, shipments associated with Specialized Bicycle Components Inc. fell 20.6% year over year in the three months to Aug. 31, while those linked to Giant Manufacturing Co. Ltd. in fact increased 41.1%.

(Panjiva Research - Consumer Durables)

Cameco cuts uranium supplies, Kazakhstan plugs the gap in US imports
The uranium industry is suffering from volatile performance after the U.S. paused its section 232 review of the sector in favor of setting up a working group to consider future business practices. The global uranium price fell 8.0% year over year in the three months to July 31, leading Canada’s Cameco Corp. to reduce its sales.

The reduction can be seen in a 14.3% year-over-year decline in Canadian exports to the U.S. in the three months to end-July. Kazakhstan’s state-owned miner, JSC National Atomic Co. Kazatomprom, said the industry's response to falling demand has been too slow yet, ironically, Kazakh exports to the U.S. surged 17x over the same time period. The remainder of the 25.2% rise in U.S. imports is due to additional shipments from France and Russia.

(Panjiva Research - Metals & Mining)

Christopher Rogers is a senior researcher at Panjiva, which is a business line of S&P Global Market Intelligence, a division of S&P Global Inc. This content does not constitute investment advice, and the views and opinions expressed in this piece are those of the author and do not necessarily represent the views of S&P Global Market Intelligence.

The Supply Chain Daily has an editorial deadline of 5:30 a.m. ET. Some external links may require a subscription. Links are current at the time of publication. S&P Global Market Intelligence is not responsible if those links are unavailable later.