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Batteries behind CES stars see boost; Mexico prunes its oil hedge

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.

Segway Ninebot grabs headlines at CES, batteries the unsung star
The 2020 Consumer Electronics Show features mobility products, with Segway Inc.'s growing range of electric scooters and bikes and its more exotic S-Pod device, for example, making an appearance. Ninebot Inc.-owned Segway's recent growth is evidenced by U.S. seaborne imports linked to the firm, which are mostly battery-related and jumped 97.9% year over year in 2019 despite a slowdown in the fourth quarter.

Total U.S. imports of lithium ion batteries climbed 16.9% year over year in the 12 months to Oct. 31 though the rate of growth slowed to 1.6% in the fourth quarter. While gadget demand remains strong, imports linked to Panasonic Corp. fell 20.7% in the fourth quarter. That may be due to reduced demand as Tesla Inc. ramps up production of batteries in Nevada and vehicles in Shanghai.

Total U.S. battery imports from China have continued to grow as most remain exempt from trade war-related tariffs.

(Panjiva Research - Tech. Hardware)

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Mexico's pruned oil hedge follows Pemex export decline
The Mexican government completed its hedging of oil exports for 2020 at $49 per barrel compared to $55 per barrel a year earlier and current market prices of $63 per barrel. The conservative move, which comes as global oil markets are roiled by Middle East tensions, followed a drop in Mexico's oil and petroleum product exports of 19% year over year in the three months to Nov. 30, 2019.

Petróleos Mexicanos SA de CV, the state-owned oil company, has also been a victim of U.S. oil independence with a 10% drop in northbound shipments over the same period. Shipments to Europe, including Spain where Repsol SA and BP PLC have refineries, declined 14.7%.

(Panjiva Research - Energy)

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Giant, Trek makes tracks out of China as tariffs meet the electoral cycle
The U.S. government has issued a further 83 exemptions from tariffs on Chinese imports covering 55 products and 39 companies. The exemptions cover tariffs applied in September 2018 which will remain in place despite the forthcoming "phase one" trade deal between the U.S. and China. The use of exemptions will remain important throughout 2020 as well as more fundamental strategic changes such as relocating production.

One of the largest group of exemptions this time around applies to children's bicycles. This likely reflects the political optics of applying tariffs to children's products ahead of the November elections as much as industrial supply chain considerations.

U.S. imports of bicycles from China fell by as much as 47.3% year over year in the 2019 fourth quarter. Shipments from Taiwan — the second largest supplier — also fell by 10%. The latter may reflect the demand effect from higher cost products.

The proportion of seaborne imports from China linked to Roth Distributing Co., Inc.'s Trek fell to 61.4% in the fourth quarter from 87.1% a year earlier. Shipments from China linked to industry leader Giant Manufacturing Co. Ltd., meanwhile, fell to 42.8% of the firm's total from 59.2%.

(Panjiva Research - Consumer Durables)

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Airxcel plays it cool while waiting for tariff exemptions
Heating and ventilation system manufacturer Airxcel, Inc. received two exemptions from duties applied to U.S. imports from China for its Maxxair ventilation brand. Across all its applications for leniency from tariffs applied since July 2018 the firm has achieved a success rate of 16.7%. By comparison the rate was 19.5% for all companies requesting exemptions. Most of Airxcel's applications are still outstanding.

The likelihood of continued tariffs throughout 2020 despite the forthcoming "phase one" U.S.-China trade deal means exemptions remain as important as ever. Airxcel has yet to reorient its supply chain, with 100% of U.S. seaborne imports linked to the firm coming from China or Hong Kong in the fourth quarter.

Indeed the firm's total imports have grown by 46.7% year over year in the fourth quarter due to a surge in imports of air conditioners, which have increased by 425%, and fan systems which grew by 63.4%. Imports of other products, including electricity generating sets, have waned — perhaps reflecting an absence of tariff exemptions.

(Panjiva Research - Capital Goods)

Toyota deprioritized US as Japan's automakers suffer another tough month
Japan's big seven automakers took another turn for the worse in November 2019 after global production fell 6.3% year over year. Exports from Japan were a small bright spot with a 2.8% gain, following a 2.5% decline in the prior three months.

The improvement was led by Toyota Motor Corp. exports, which surged 26.3% — albeit from unusually low levels a year earlier — while Nissan Motor Co. Ltd. climbed 10.8%. Nissan reports regional export data — shipments to North America rose 6.8% in November — but Toyota does not.

Toyota may be deprioritizing the U.S. market, with U.S. seaborne imports associated with the firm falling 10.7% year over year in the fourth quarter. Japanese automakers can at least now focus on sales, with the U.S.-Japan mini trade deal that took effect from Jan. 1 having cut the risk of national-security related import duties.

(Panjiva Research - Automotive)

S&P Global Market Intelligence is owned by S&P Global Inc.

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.