COVID-19 Bulletin: April 6

Good Afternoon,

More COVID-19 news relevant to the plastics industry:

Supply

• The Monday meeting between Russia, Saudi Arabia and other oil-producing nations was postponed until Thursday; oil prices fell on the news.
• The White House threatened to use tariffs on oil to address low prices.
• At a meeting with U.S. oil executives on Friday, the White House proposed allowing the use of the Strategic Petroleum Reserve for temporary storage of swelling inventories but pledged no specific support for the struggling industry.
• Texas faces an outsized impact from COVID-19, with more than 70 oil producers in financial peril due to the oil price drop and scarce shale financing; the active rig count fell to 338, the lowest in three years.
• Nova Chemicals paused construction of its Sarnia, Ontario, expansion to protect workers from COVID-19.

Supply Chain

• The COVID-19 crisis is exposing the prevalence and risk of supply chain financing, where companies extend short-term payables to bolster cash flow and the appearance of their balance sheets.
• COVID-19 is amplifying the need for supply chain flexibility and transparency and highlighting the importance of environmental, social and governance (ESG) priorities.
• Our Gold Standard logistics and transportation partners report no service disruptions.
• Ports continue to operate steadily:

Markets

• Federal stay-at-home guidelines were extended until the end of April; forty-five states representing more than 97% of plastic shipments have imposed mandates.
• The St. Louis Federal Reserve estimates unemployment in April could peak above 30%, a record:

• Plastic cashier barriers are being installed nationwide as one more social distancing protection, creating heightened demand for clear sheet.
• Despite doubling face mask production, 3M found itself at the center of controversy as global demand and the Defense Production Act created allocation conflicts.
• Boeing has indefinitely suspended manufacturing in Washington.
• Automakers are offering 84-month loans and other incentives to entice reluctant buyers.
• While several automakers anticipated resuming production in April, state stay-at-home mandates and uncertainty about the COVID-19 health crisis are creating uncertainty.
• Robotics makers are scrambling to produce machines to fight COVID-19, including disinfecting robots and temperature detectors.
• Our Automotive team is supporting automakers ramping up to make ventilators and other safety equipment. We’ve seen molds turned in two weeks.
• Our Wire & Cable team reports the COVID-19 crisis is impacting the construction industry. On Saturday, Ontario, Canada, joined Quebec in imposing a ban on industrial and new residential construction.
• Johns Hopkins tracks the global spread of COVID-19.

International

• Our international shipping partners report a spike in shipments to China and Vietnam for April and May.
• Our international shipping partners are reporting some delays at certain transshipment ports due to land-freight congestion related to COVID-19.
• Emerging markets are expected to suffer their first contraction since the early 1950s; Mexico GDP could fall 8% this year, according to Bank of America.
• European Union nations clashed over Europe’s response to the economic fallout of COVID-19, putting new pressures on the alliance.

Our Operations

• NOTICE TO CLIENTS: M. Holland Company will be closed on Good Friday, April 10.  Our Mexico operations will be closed on Thursday and Friday.
• We have canceled our annual Business Conference in June due to COVID-19 and our concern for the safety and well-being of Mployees and attendees.
• M. Holland is open for business, deemed essential and will continue to operate at full capacity. We have issued the following status statement:

In accordance with the guidance provided by the U.S. Department of Homeland Security Cybersecurity & Infrastructure Security Agency (CISA), M. Holland Company is considered a member of a critical infrastructure industry and will therefore remain operative. As such, with any necessary accommodations made to ensure the health and safety of our staff and business partners, we will continue to fully perform our normal business operations.

Thank you,

M. Holland Company

We will provide further COVID-19 bulletins as circumstances dictate. For all COVID-19 updates and notices, please refer to the M. Holland website.