COVID-19 Bulletin: May 6

Good Afternoon,

More COVID-19 news relevant to the plastics industry:

Supply

• U.S. crude inventories rose a by a more-than-expected 8.4 million barrels last week, putting pressure on prices. The WTI was down more than 5% to $23.21/bbl, while Brent was down 3% to $30.14/bbl. 
• COVID-19 and the collapse of oil prices have upended the optimistic outlook for the North American plastics industry, where hundreds of expansions had been planned or permitted for the coming years.

Supply Chain

• The White House is coordinating policy across various agencies to shift supply chains away from China, including consideration of tax and other incentives.
• Air freight costs are soaring due to constrained air freight capacity on passenger airliners.
• Mexico’s shutdown is complicating restarts for U.S. manufacturers who are dependent on the country for component parts.
• Our Gold Standard logistics and transportation partners continue to operate without disruption.
• U.S. ports continue to operate smoothly:

Markets

• Federal Reserve Vice Chairman Richard Clarida expects a rebound to begin in the second half of the year and acknowledged that further central bank action may be needed to support the shuttered economy. 
• One day after announcing the Coronavirus Task Force would be disbanded and with the death rate from the virus expected to nearly double by August, the White House now says the Task Force will remain intact indefinitely.
• Beef and pork processing are down 40% in the U.S. due to infection rates at plants, causing rationing by businesses, from grocery stores to restaurants. 
• The U.S. trade deficit increased 12% in March, with both imports and exports falling.
• People returning to factories and offices may face new forms of surveillance technology, from temperature sensors to contact-tracing apps, posing privacy issues.
• Insurers have been slammed by business interruption claims and a drop in investment income, quarterly earnings releases by several big players reveal. One positive: profits spiked for auto insurance due to fewer claims.
• Fiber optic cable is attracting attention from investors as more people work from home and connect digitally.
• Some members of Congress have begun pushing for a bailout for automobile makers, who have seen demand collapse. 
• General Motors, in announcing an unexpected profit in the first quarter, said it plans to reopen facilities starting May 18.
• Fiat Chrysler Automobile reported a big first quarter loss and indicated it will resume operations beginning May 18.
• Heavy duty truck orders fell to a record low in March, down more than 70% from the year-ago period.
• Thirty U.S. states are in some stage of reopening their economies.
• While COVID-19 is tragically taking lives, reduced air pollution due to shutdowns is having a positive health impact in Europe:

International

• German car companies are in discussions with the government about a possible bailout for the industry. 
• The European Commission sees a gloomy outlook for the continent, with a deep recession extending into 2021 and a growing economic disparity between the wealthy and less wealthy nations.

Our Operations

• Our Healthcare team is offering video conferences for clients seeking advice on medical material selection, manufacturing and regulations. To schedule a meeting, contact Global Healthcare Market Manager Josh Blackmore.
• To access 3D printing training, order parts and seek technical assistance, visit our new online resource.
• M. Holland is fully operational and prepared to meet client needs for materials, material selection, logistics services and technical support.
• 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.