{"id":81020,"date":"2024-09-16T00:00:00","date_gmt":"2024-09-16T00:00:00","guid":{"rendered":"https:\/\/enterpriseam.com\/logistics\/2024\/09\/16\/today-egypts-lng-tender-yields-results-nvidia-chips-make-their-way-into-uae-data-centers\/"},"modified":"2024-09-16T00:00:00","modified_gmt":"2024-09-16T00:00:00","slug":"today-egypts-lng-tender-yields-results-nvidia-chips-make-their-way-into-uae-data-centers","status":"publish","type":"post","link":"https:\/\/enterpriseam.com\/logistics\/2024\/09\/16\/today-egypts-lng-tender-yields-results-nvidia-chips-make-their-way-into-uae-data-centers\/","title":{"rendered":"TODAY: Egypt\u2019s LNG tender yields results + Nvidia chips make their way into UAE data centers"},"content":{"rendered":"

Good morning, nice people. <\/strong>It\u2019s a hefty issue this morning with updates from Egypt, the UAE, and a smattering of news from around the world. But first, let\u2019s unpack big aviation news taking shape state-side\u2026<\/p>\n

THE BIG LOGISTICS STORY ABROAD- <\/strong>Boeing workers go on strike<\/strong>:<\/strong> Over 30k Boeing workers at the company\u2019s US West Coast factory went on strike on Friday after rejecting a contract proposal demanding higher wages. The strike at Boeing\u2019s 737 Max jets production hub worsens the firm\u2019s already existing supply chain troubles and threatens to further lengthen delivery delays<\/a>. Contract negotiations are slated to resume this week as the manufacturer looks to avoid potential damage to its finances.<\/p>\n

Things could drag on:<\/strong> The strike \u201ccould go on for a while,\u201d as workers remain confident they can nab larger wage boosts and improved pensions, Reuters<\/a> reported, citing a National Public Radio interview with union leader Jon Holden. <\/p>\n

A dark outlook:<\/strong> Boeing had been making progress towards boosting production levels back to 38 a month by the end of this year, but now \u201cthat\u2019s going to take longer,\u201d CEO Brian West said at a conference<\/a> on Friday. The manufacturer has some 4.7k 737 MAX jets on order. The last Boeing workers\u2019 strike, back in 2008, closed plants for almost two months and cut revenue by some USD 100 mn per day.<\/p>\n

The effects are set to ripple through Boeing\u2019s supply chain<\/strong>, with suppliers slated to feel the impacts of \u201cdelayed orders and financial strain,\u201d Moody\u2019s supply chain specialist John Doigian was quoted as saying by Reuters. Regardless, key Boeing supplier of 737 Max jet fuselage Spirit AeroSystems will \u201cremain close to Boeing at this time,\u201d spokesperson Joe Buccino was quoted as saying by Reuters.<\/p>\n

Coverage of the strike grabbed a lot of ink in international press over the weekend:<\/strong> Reuters<\/a> | AP<\/a> | The New York Times<\/a> | The Washington Post<\/a> | Bloomberg<\/a> | CNN<\/a> | BBC<\/a> | CNBC<\/a> <\/p>\n

IN OTHER BOEING NEWS- US FAA head to testify on <\/strong>Boeing next week:<\/strong> The head of the US Federal Aviation Administration (FAA) is set to testify before the US Senate panel on the FAA\u2019s oversight of Boeing\u2019s safety measures, Reuters<\/a> reports. The hearing, set for on 25 September, comes as the FAA\u2019s Michael Whitaker has ramped up scrutiny on the plane manufacturer. A production audit into Boeing fuselage supplier Spirit was launched after a 737 MAX 9 lost a door plug mid-air in January. <\/p>\n

HAPPENING THIS WEEK-<\/p>\n

#1- British trade ministers are in Riyadh for talks on a trade agreement with the GCC<\/strong>, according to a statement<\/a>. Trade Secretary Jonathan Reynolds and Trade Policy Minister Douglas Alexander are both set to lead negotiations, with Reynolds saying he\u2019s looking for a \u201chigh-quality trade [agreement] that supports jobs, helps UK companies sell their products to the region and increases choice for consumers.\u201d <\/p>\n

REMEMBER-<\/strong> The GCC and the UK are hoping to wrap trade talks<\/a> by the end of this year, with six rounds of talks having taken place so far. <\/p>\n

#2- T<\/strong>he <\/strong>Intelligent Transport Systems World Congress<\/a><\/strong> will open its doors today in Dubai and run through to <\/strong>Friday.<\/strong>The Congress is expected to welcome 20k participants to explore innovations in smart mobility and transportation technology.<\/p>\n

LATER IN THE WEEK- The <\/strong>Saudi Maritime and Logistics Congress<\/a><\/strong> will kick off on Wednesday in Dammam and conclude on<\/strong> Thursday. <\/strong>The event will gather international industry leaders in the maritime sector to discuss a range of topics including interconnected logistics, supply chains, digitalization, decarbonization and workforce development.<\/p>\n

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WATCH THIS SPACE-<\/p>\n

<\/a>#1- A logistics hub on the cards for Cairo International Airport?<\/strong> Chinese state-owned construction firm and China Energy subsidiary Gezhouba Group proposed establishing a \u201clogistics cargo city\u201d at Cairo International Airport during a meeting with Egypt\u2019s Aviation Ministry, according to a statement<\/a>. The statement did not provide any concrete details about the proposal, but said it would strengthen Egypt\u2019s position as a logistics hub regionally and internationally, particularly in light of growing demand for air cargo services.<\/p>\n

#2- <\/strong>Morocco is set to expand Tangier-Mediterranean Freezone\u2019s Tanger Automotive <\/strong>City<\/strong> to address the growing demand from industrial investors, Morocco World News<\/a> reported on Thursday. Under the plan, the zone will nearly double in size, with the area to be extended to 1.18 hectares, up from 517 hectares. Neither the timeline nor the investment ticket have been disclosed. <\/p>\n

<\/a>#3- Saudi Arabia\u2019s second flag carrier Riyadh Air kicked off test flights on Thursday<\/strong>, with its maiden flight launching from King Khalid International Airport in Riyadh to King Abdulaziz International Airport in Jeddah, it said in a statement posted on X<\/a>. The move is part of a process to secure the Air Operator Certificate from the General Authority of Civil Aviation. Riyadh Air plans to start commercial operations next year.<\/p>\n

#4- The <\/strong>Red Sea crisis shifts fortunes in Asia\u2019s freight industry:<\/strong> The Red Sea crisis affected the earnings for several Asian firms in 1H 2024 with companies who rely on exports reporting a costly impact, Bloomberg<\/a> reported on Thursday. \u201cWe believe rates will return to below breakeven once supply chains normalize, due to the structural challenges facing the industry,\u201d Bloomberg Intelligence noted, highlighting that the supply and demand gap will likely weigh on the outlook for container rates and liner earnings. <\/p>\n

Transportation companies are benefiting from the higher freight rates: <\/strong>Chinese shipping firm Cosco Shipping Holdings saw a boost in earnings driven by higher revenues from its container shipping business, while Orient Overseas International\u2019s transpacific trade route saw improved performance from higher freight rates. Port operator China Merchant Port Holdings saw an increase in transhipment cargoes in its Sri Lanka ports, while Adani Ports recorded a rise in overall volumes. Cathay Pacific Airways also saw a 10% y-o-y boost in cargo volume. <\/p>\n

IN OTHER RED SEA NEWS- Towing operation begins on <\/strong>oil tanker <\/strong>stranded in Red Sea: <\/strong>Operations to tow the abandoned Greek-registered oil tanker Sounion<\/a> have been launched in the Red Sea using at least two tugboats owned by a Greek-based salvage company, Reuters<\/a> reported on Saturday, citing shipping sources. The oil tanker, which is carrying 1 mn barrels of crude oil, was abandoned after being struck by Yemen\u2019s Houthis in August<\/a>. The oil will be transferred from the ship upon the completion of the towing operation, which is being secured by the EU\u2019s Aspides Red Sea Task Force. <\/p>\n

Background: <\/strong>The Sounion was evacuated<\/a> by Aspides following the initial attack last month. The vessel was struck by several projectiles off the coast of Yemen\u2019s Hodeidah Port, causing a fire to break out onboard. <\/p>\n

#5- US confirms tariffs on Chinese imports: <\/strong>The US has confirmed that steep tariff hikes on Chinese imports, including a 100% duty on EVs, will go into effect on 27 September, Reuters<\/a> reported on Friday. Despite industry complaints the move could disrupt supply chains, US officials argue that these \"tough, targeted\" measures will reduce reliance on Chinese supplies and counter China's market dominance. The tariffs will target key renewable energy components including solar cells, semiconductors, and EV batteries in a bid to protect domestic US industry from China's imports propped up by state subsidies. The action also maintains Trump-era tariffs on USD 300 bn worth of Chinese goods, while offering temporary relief for US port operators and medical suppliers.<\/p>\n

ICYMI- <\/strong>The Biden administration has postponed<\/a> its final decision on imposing the tariffs multiple times, citing a statement from the US Trade Representative\u2019s Office (USTR). The tariffs were initially set to take effect on 1 August.<\/p>\n

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MARKET WATCH-<\/p>\n

#1- <\/strong>Oil prices inched up in early morning trading as expectations rose regarding a US <\/strong>interest rate cut this week<\/strong>, Reuters<\/a> reports. Brent crude futures for November were up USD 0.03 to USD 71.64 a barrel, while West Texas Intermediate (WTI) crude futures for October increased USD 0.16 to trade at USD 68.81 a barrel.<\/p>\n

<\/a>#2- Saudi crude supply to China poised for a jump next month: <\/strong>The Kingdom\u2019s oil exports to the world\u2019s top consumer China are expected to climb to 46 mn bbl in October, up from 43 mn in September, Reuters<\/a> reports, citing trade sources. The boost follows Aramco\u2019s decision to slash the official selling price of its flagship Arab Light crude<\/a> to Asian buyers to its lowest level in nearly three years.<\/p>\n

The price cut spurred demand from Chinese refiners<\/strong>, including major players like Sinopec and PetroChina, keeping Saudi crude in close competition with Russia as China\u2019s top suppliers. <\/p>\n

#3- <\/strong>India\u2019s oil secretary <\/strong>Pankaj Jain<\/strong> called for OPEC+ to raise its oil output to meet the <\/strong>rising fuel demand in countries like India<\/strong>, Reuters<\/a> reports. India imports over 80% of its oil needs, and the country\u2019s refiners will buy oil from suppliers that offer cheaper rates, Jain was quoted as saying. He added that Indian fuel retailers might lower gasoline and gasoil prices if crude oil prices stay low.<\/p>\n

#4- <\/strong>Baltic index <\/strong>falls to two-week low:<\/strong> The Baltic Exchange\u2019s dry bulk sea freight index \u2014 which tracks rates for the capesize, panamax, and supramax vessel segments \u2014 fell 1.9% to 1,890 points<\/a> on Friday. The capesize index fell 4.2% to 3,089 points, while the panamax index jumped by 1.9% to 1,428 points. The smaller supramax index added one point settling in at 1,264 points.<\/p>\n

#5- <\/strong>The Drewry World Container Index decreased 13% to USD 4,168 per 40-ft container <\/strong>on <\/strong>Thursday,<\/strong> according to the latest index readings<\/a>. Spot rates for 40-ft containers are now 60% below the previous pandemic peak of USD 10.4k in September 2021, but remains 193% above the pre-pandemic rate of USD 1.4k. The average composite index YTD is USD 4.1k per 40ft container, which is USD 1.3k higher than the 10-year average rate of USD 2.8k<\/p>\n

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DATA POINTS- <\/p>\n

#1- <\/strong>The global air freight market is projected to grow at a 10.3% compound annual <\/strong>growth rate (CAGR) between 2024 and 2031 to reach USD 162.39 bn<\/strong>, up from USD 74.12 bn in 2023, according to a report by global tech group SkyQuest<\/a>. The boost in e-commerce, global supply chains, and expansion of the manufacturing industry has increased demand for international air freight services.<\/p>\n

#2- The UAE's non-oil foreign trade volume increased by 10.3% to 273.5 <\/strong>mn tons in <\/strong>2023<\/strong>, up from 248 mn tons in 2022, Al Khaleej<\/a> reports, citing data from the Federal Competitiveness and Statistics Centre. Non-Arab Asian countries were top trading partners with a 44% share, followed by European countries at 17%, and GCC countries at 12%. Imports rose 20% to 129.3 mn tons, while exports grew 13% to 120 mn tons.<\/p>\n

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THE FINANCE FORUM-<\/p>\n

Headlining the EnterpriseAM Finance Forum: <\/strong>We\u2019ll be joined for the first time on stage by a senior government official, who\u2019s joining us to outline a vision for where we\u2019re going as a community and as an economy. The keynote interview will get underway at 9am sharp, and you won\u2019t want to miss our exclusive networking breakfast from 8am.<\/p>\n

Among the topics on the agenda<\/strong>, which you can view here<\/a>:<\/p>\n