COVID-19 Bulletin: August 10

Good Afternoon,

More COVID-19 news relevant to the plastics industry:

Supply

• Crude prices were higher in early trading today, with the WTI at $41.79/bbl and Brent at $44.79/bbl.
• Oil prices are strengthening as oil demand in Asia approaches pre-pandemic levels and U.S. drilling activity is at a 15-year low. 
• The Baker Hughes count of active U.S. drilling rigs fell to 247 last week, a record low.
• U.S. oil field employment has fallen by nearly 100,000 during the pandemic, with more than 9,300 new job losses in July.
• Saudi Aramco’s earnings fell 73% in the most recent quarter compared with the year-ago period.
• High winds are hampering containment of an oil spill in the Indian Ocean off the coast of the island nation of Mauritius.
• Equinor ASA, Norway’s state oil company, said it will increase spending on renewable energy with the goal of a tenfold increase in energy from renewables by 2026.

Supply Chain

• UPS could charge up to $3 more for ground shipments and $4 for air shipments during the busy holiday season.
• The U.S. Postal Service lost $2.2 billion in the second quarter.
• FedEx is employing robotic arms for sorting packages to help alleviate a worker shortage amid soaring demand.
• Amazon is in talks with real estate investment trust Simon Property Group about converting vacant anchor spaces in malls into warehouses.
• We’re seeing the truckload freight market continuing to tighten with some LTL shippers resorting to truckload quantities due to capacity constraints in the LTL freight market. Clients are advised to provide expanded lead times on orders to help ensure delivery dates will be met.
• We’re seeing rising spot freight pricing due to capacity constraints in the industry.
• Beyond the transportation challenges, our Gold Standard logistics partners and U.S. ports continue to operate without interruption.

Markets

• U.S. COVID-19 cases topped 50,000 yesterday for the first time in six days as the national case count topped 5 million.

• With negotiations stalled on a fourth relief bill, the president on Saturday issued four executive orders extending $400 unemployment subsidies, suspending some evictions, deferring payroll taxes for those earning less than $100,000 and deferring student loan payments. There was confusion about the implementation of the measures as well as their constitutionality.
• A third of U.S. renters expect to miss their August payments after an estimated 27% of people missed their rent or mortgage payments in July.
• Children now comprise 8.8% of U.S. COVID-19 cases after new infections among them jumped 40% in the last half of July.
• A quarter of millennials, those born between 1981 and 1996, have more debt than assets and the unemployment rate among the generation stands at 12.5% as they face the second historic recession of their careers. 
• There is a growing belief among healthcare experts that some people could have immunity from COVID-19 symptoms due to prior vaccinations or different coronavirus infections, which could account for the 40% of victims who are asymptomatic.
• A research team at King’s College London, using data from a COVID-19 tracking app, have identified six different types of the virus characterized by different combinations of symptoms. The discovery could be used to predict who is most vulnerable.
• A Georgia high school thrust in the national spotlight when images of crowded hallways went viral has temporarily transitioned to online learning after students and faculty tested positive for COVID-19.
• The number of long-term unemployed, those out of work for more than three months, is at the highest rate since records were started in 1948.
• The relief law passed in March included provisions allowing companies to use 2020 losses to offset income from the prior five years when income tax rates were higher than today, creating a tax arbitrage opportunity that is driving some corporations to maximize losses this year.
• The U.S. International Development Finance Corporation canceled plans to extend a $765 million federal loan to Kodak to make chemicals for COVID-19 drugs after the Securities and Exchange Commission and Congress launched separate investigations of the loan. Kodak’s stock, which rose from $2.65 to $60 when the loan was announced, plunged to below $9.00 a share in pre-market trading today.
• The Federal Reserve’s $600 billion Main Street Lending Program has been marginally effective in helping struggling businesses, with only $77 billion in loans made to just eight companies.
• People deferring elective surgeries during the pandemic have created a windfall for health insurers:

• Many employers are encountering an unexpected new healthcare expense — the cost of COVID-19 testing for employees as major health insurers refuse to pay for employee screening.
• College football’s Big Ten conference canceled its 2020 season. 
• COVID-19 cases globally hit nearly 20 million over the weekend.

International

• European countries are confounded by America’s response to the pandemic, as the U.S. case count now exceeds 5 million. 
• COVID-19 deaths in Brazil topped 100,000 over the weekend. The country’s case count exceeds 3 million, the second highest globally behind the U.S.
• Latin America passed Europe on Friday to become the region with the highest number of COVID-19 deaths. 
• Fear of Mexican hospitals, where 40% of COVID-19 patients die, is prompting those infected to delay seeking medical help and exacerbating the consequences of the virus.
• Australia set a daily record for COVID-19 deaths while new cases slowed in hard-hit Victoria; New Zealand marked 100 days without a community transmission.
• Eighteen people were killed and 120 were injured when an Air India Express flight crashed on takeoff in Dubai as it evacuated Indian citizens stranded by the pandemic.
• Canada will impose $2.7 billion in tariffs on U.S. aluminum goods beginning September 16 in retaliation for the White House’s surprise imposition last week of a 10% tariff on Canadian aluminum to protect the domestic industry.
• In an escalation of tensions, China announced sanctions on 11 U.S. citizens, including many lawmakers, in retaliation for sanctions imposed on Chinese officials by the U.S. last week.

Our Operations

• Our M. Holland Technical Innovation Center, which closed in the wake of Tropical Storm Isaias, reopened today.
• Join us for our next Fireside Chat on August 19. Panelists from M. Holland and Plante Moran will discuss the new USMCA and how it will impact businesses, the economy and the plastics industry. For more information and to register, please visit our website.
• To access 3D Printing training, order parts and seek technical assistance, visit our new online resource.
• Market Expertise: M. Holland offers a host of resources to clients, prospects and suppliers across nine strategic markets. To arrange a videoconference or meeting with any of our Market Managers, please visit our website.
• M. Holland’s official status statement is available here.

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.