MACROECONOMICS
German export orders dip
Falling export demand hit Germany’s key mechanical engineering sector in April, the VDMA industry federation said yesterday. In April, overall incoming orders were down 1 percent compared with April last year, VDMA said in a statement, with export orders falling 4 percent, while domestic orders rose 8 percent. Taking a three-month comparison to iron out short-term fluctuations, overall orders were down by 4 percent in the period from February to April. Foreign orders fell 7 percent in the three-month period, but domestic orders rose 5 percent, VDMA calculated.
MACROECONOMICS
Greens calms austerity fears
Greece on Sunday sought to calm fears of further austerity, after German Finance Minister Wolfgang Schaeuble raised the prospect of a third rescue package for the struggling nation. Schaeuble said in an interview published on Sunday that “it’s possible that Greece might require further aid, of a limited amount.” “It would be significantly lower than the two previous rescue packages — meaning no more than 10 billion euros (US$13.6 billion),” he told Focus magazine. However, the Greek finance ministry said the country had no immediate need of extra help.
ENERGY
Origin to buy Karoon stake
Origin Energy Ltd agreed to buy Karoon Gas Australia Ltd’s stake in a ConocoPhillips natural gas project for about US$800 million, giving the seller’s shares the biggest gain in more than five years. ConocoPhillips, the third-largest US oil company, is operator with 40 percent, while PetroChina Co holds the balance of the project in the Browse Basin off Western Australia. Origin, Australia’s largest energy retailer, is already ConocoPhillips’s partner in the Australia Pacific liquefied natural gas venture in Queensland state, one of seven export developments going ahead in the country to tap Asian demand.
HEALTH
Halma buys Rohrback
Health and safety device maker Halma PKC said it had bought California-based Rohrback Cosasco Systems Inc, a maker of pipeline corrosion monitoring products, for US$108 million to expand its portfolio of critical safety products. Halma, which makes products ranging from water quality test kits to smoke detectors and automatic door sensors, said it would also pay an additional US$8 million for Rohrback Cosasco’s existing cash reserves. The deal is expected to add to earnings immediately, the company said. Halma also said it had sold its Monitor Elevator Products Inc to Innovation Industries Inc for US$6 million in cash with US$900,000 retained in escrow for release in two years.
AIRLINES
JAL warns of capacity glut
Japan Airlines Co (JAL) said the release of new operating slots at Tokyo’s Haneda airport has created a capacity glut that is likely to persist for another 18 months, weighing on average fares and earnings. “There was a large increase in the supply, and demand has not kept up at this point in time,” chairman Masaru Onishi said yesterday in Qatar. “The same happened for international flights. Hence we believe that for this fiscal year, business will be a little difficult for us.” Excess flights at Haneda come as JAL seeks to improve its financial position after emerging from bankruptcy protection in 2011. JAL is “financially healthy,” but will focus on improving its cash position and credit rating before boosting shareholder returns, Onishi said.
TARIFF TRADE-OFF: Machinery exports to China dropped after Beijing ended its tariff reductions in June, while potential new tariffs fueled ‘front-loaded’ orders to the US The nation’s machinery exports to the US amounted to US$7.19 billion last year, surpassing the US$6.86 billion to China to become the largest export destination for the local machinery industry, the Taiwan Association of Machinery Industry (TAMI, 台灣機械公會) said in a report on Jan. 10. It came as some manufacturers brought forward or “front-loaded” US-bound shipments as required by customers ahead of potential tariffs imposed by the new US administration, the association said. During his campaign, US president-elect Donald Trump threatened tariffs of as high as 60 percent on Chinese goods and 10 percent to 20 percent on imports from other countries.
Taiwanese manufacturers have a chance to play a key role in the humanoid robot supply chain, Tongtai Machine and Tool Co (東台精機) chairman Yen Jui-hsiung (嚴瑞雄) said yesterday. That is because Taiwanese companies are capable of making key parts needed for humanoid robots to move, such as harmonic drives and planetary gearboxes, Yen said. This ability to produce these key elements could help Taiwanese manufacturers “become part of the US supply chain,” he added. Yen made the remarks a day after Nvidia Corp cofounder and chief executive officer Jensen Huang (黃仁勳) said his company and Taiwan Semiconductor Manufacturing Co (TSMC, 台積電) are jointly
United Microelectronics Corp (UMC, 聯電) expects its addressable market to grow by a low single-digit percentage this year, lower than the overall foundry industry’s 15 percent expansion and the global semiconductor industry’s 10 percent growth, the contract chipmaker said yesterday after reporting the worst profit in four-and-a-half years in the fourth quarter of last year. Growth would be fueled by demand for artificial intelligence (AI) servers, a moderate recovery in consumer electronics and an increase in semiconductor content, UMC said. “UMC’s goal is to outgrow our addressable market while maintaining our structural profitability,” UMC copresident Jason Wang (王石) told an online earnings
MARKET SHIFTS: Exports to the US soared more than 120 percent to almost one quarter, while ASEAN has steadily increased to 18.5 percent on rising tech sales The proportion of Taiwan’s exports directed to China, including Hong Kong, declined by more than 12 percentage points last year compared with its peak in 2020, the Ministry of Finance said on Thursday last week. The decrease reflects the ongoing restructuring of global supply chains, driven by escalating trade tensions between Beijing and Washington. Data compiled by the ministry showed China and Hong Kong accounted for 31.7 percent of Taiwan’s total outbound sales last year, a drop of 12.2 percentage points from a high of 43.9 percent in 2020. In addition to increasing trade conflicts between China and the US, the ministry said
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