Key transactions & industry news Weekly Update 09/06/2024

Transportation & Logistics

LA port terminal getting $52 million for on-dock rail. The Los Angeles Harbor Commission has approved a lease amendment that finalizes plans for $52 million to improve the on-dock rail capacity at the Port of Los Angeles Pier 300, which is the second-largest terminal at Los Angeles owned by CMA CGM Group and operated by subsidiary Fenix Marine Services.

LTL carriers see softer volume trends in August. XPO saw a 4.6% year-over-year decline in tonnage during August, the combination of a 4.5% decline in shipments and a 0.1% dip in weight per shipment. Old Dominion reported a 6.1% y/y tonnage decline in August, following a 0.9% decline in July. ArcBest’s lower shipment weights and tougher comps weighed on its results in August, prompting it to modestly lower its margin expectations for the quarter. Saia was an outlier in August that reported a y/y tonnage increase of 8.2% in August, following a 5% increase in July.

Transportation capacity steps higher in August, survey shows. Growth in transportation capacity accelerated in August while price increases slowed,. The Logistics Managers’ Index, a monthly poll of supply chain executives, returned a 56.7 reading for transportation capacity in August, 5.8 percentage points higher than in July and the highest reading since May. (The LMI is a diffusion index in which a reading above 50 indicates expansion while one below 50 signals contraction.) The heightened view on capacity could be tied to smaller carriers coming back to the market as rates improve and given the expectation for a seasonal lift in freight demand.

Metals & Mining

LME aluminium benchmark price moves down to US$2366/t; SHFE price loses US$3/t. On September 5, LME aluminium opened at $2,392 per tonne, with a high of $2,410 per tonne, a low of $2,363 per tonne and closed at $2,378 per tonne, down $21.5 per tonne, a decrease of 0.9%.

EGA updates UAE’s largest recycling plant is slated to come into operation in 2026. The construction of the plant, adjacent to EGA’s existing Al Taweelah smelter, officially began in November 2023 and is progressing ahead of scheduled time. The recycling plant will have an annual capacity of processing 170,000 tonnes of pre and post-consumer aluminum scrap into low-carbon, high-quality aluminium billets. These primary products will be sold by EGA under the brand name RevivA.

Aluminum extrusion manufacturer Keymark expands operation with new coating facility in Lakeland, Florida. The newly inaugurated 76,000-square-foot facility features a cutting-edge chrome conversion-free, 25-foot vertical powder coating line. With this new facility, Keymark’s total production space in Lakeland now exceeds 330,000 square feet, a clear sign of the company’s growth and potential.

Energy

BofA lowers 2025 Brent forecast by $5/bbl on softer demand. Bank of America downgraded its 2025 Brent price forecast by $5 to $75 per barrel, citing weaker demand, particularly from China, and significant inventory builds. Subdued global oil demand growth of 1.1 million barrels per day (bpd) year-on-year in 2025, combined with a non-OPEC oil supply increase of nearly 1.6 million bpd, will limit OPEC+’s ability to raise output.

Others

US unemployment falls, suggesting an orderly labor market slowdown. U.S. employment increased less than expected in August, but a drop in the jobless rate to 4.2% suggested an orderly labor market slowdown continued and probably did not warrant a big interest rate cut from the Federal Reserve this month.