Caterpillar shuts facilities on low demand: Update

Adds information on withdrawn financial outlook in paragraph 4.

Heavy equipment manufacturer Caterpillar this week issued temporary shutdowns for three manufacturing plants as customer demand from the oil and gas market waned.

The company temporarily shuttered foundry facilities in Mapleton, Illinois, and Hodges, South Carolina, and a large engines manufacturing plant in Lafayette, Indiana.

The shutdowns at the Lafayette plant and the Mapleton foundry are scheduled to last one week. The Hodges foundry is planned to be offline for two weeks.

Caterpillar also today withdrew previously published financial guidance for 2020. The company has begun feeling impacts upon its supply chain because of the coronavirus pandemic and is adhering to business continuity plans to ease potential low-supply scenarios.

The Argus assessment for WTI crude oil has slipped by just over 61pc to $24.49/bl from a recent peak in early January. US rig counts have declined to 772 from 796 on 3 January according to Baker-Hughes.

Refiner Phillips 66 saw US gasoline demand fall by 20pc in recent days, while midstream company Magellan anticipates combined demand for gasoline and jet fuel dropping as much as 25pc in the second quarter.

By Will Ehrhardt