COVID-19 Bulletin: June 16

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Supply

• Oil prices rose nearly 2% to fresh two-year highs yesterday after a higher-than-expected crude draw of 8.5 million barrels was reported for last week. 
• Crude prices were higher in mid-day trading today, with WTI up 0.7% to $72.60/bbl and Brent up 1% to $74.73/bbl. Natural gas was 0.5% higher at $3.26/MMBtu.
• The world’s biggest oil traders expect global oil demand to return to pre-pandemic levels in the second half of 2022. 
• Prices for power and natural gas in both Texas and California are soaring to new highs as homes and businesses blast their air conditioning to combat an intense heat wave across the region. 
• A U.S. District Court judge has blocked the White House’s earlier announced plan to halt new oil and gas leases on federal land. 
• The U.S. Energy Information Administration expects shale output from the U.S. to increase by 38,000 bpd in July. 
• Saudi Arabia is planning to boost its crude oil production to 10 million bpd by the end of the year, up by 1.5 million bpd from May. 
• With gas inventories 25% below their five-year average, the EU is turning back to coal to meet electricity demand that has returned to pre-pandemic levels. 
• Petroleum refining company Equinor is planning to commit more than 50% of its investments to renewable energy and CO2 capture by 2030, up from less than 5% in 2020. 
• Global mining company Rio Tinto will begin studying the use of hydrogen instead of natural gas for heat in aluminum refining as the company looks to lower its carbon emissions. 
• Dutch power company Eneco, which already sources two-thirds of its production capacity from renewables, will invest roughly $2.4 billion with the aim of becoming carbon neutral by 2035. 
• An expanding LNG industry and lack of infrastructure to prevent gas flaring make’s Africa’s energy sector the most polluting in the world, with analysts urging oil and gas corporations to do more to lower their carbon footprint and diversify their energy. 
• A new study shows that as electric vehicles become more common, the demand for crop-based biofuels will diminish, with demand for ethanol expected to fall 40% through 2035. 
• Our most recent list of force majeure and allocation announcements from suppliers is here. 

Supply Chain

• Death Valley, California, home to the hottest air temperature recorded on earth, could see its record broken this week as an intense heat wave continues to slam southern and southwestern states, particularly California, Nevada, Arizona and Utah. 
• More than 50 million Americans in eight states were under heat warnings Tuesday, as dozens of daily temperature records were broken. 
• Nissan will idle production of three of its models at a Tennessee plant for an additional four weeks as the global semiconductor shortage continues to affect the auto industry. 
• Ford has begun shipping and manufacturing new Bronco SUVs at its Michigan assembly plants after months of pandemic-induced supply shortages delayed a planned launch. 
• Pet supply retailer Chewy said out-of-stock issues cost it an estimated $40 million in lost sales in the most recent quarter.
• The U.S. and EU agreed to suspend tariffs on $11.5 billion of goods ranging from food, wine, sprits and machinery for the next five years, ending a trade spat that began in late 2019. 
• Copper prices hit an eight-week low yesterday, dropping 4.1% to $9,553.50 per metric ton and down 9.3% from their record high in May. The news came after China announced plans to release national reserves of major industrial metals to combat rising commodities prices. 
• Lumber prices in the U.S. are continuing to fall, down 42% this week from early May, as home building companies begin to sell from their stockpiles. 
• California-based resin logistics company Plastic Express is set to occupy the first of three buildings planned at the Cedar Port Logistics Center in Texas, creating 50 jobs and allowing customers immediate access to the Port of Houston and two Tier 1 railroads. 
• Hong Kong is easing strict quarantine requirements imposed on vessels calling at the Asian shipping hub, restrictions that diverted many ships to regional ports in China, Singapore and Taiwan. 
• Container shipper Costamare is entering the dry bulk market, acquiring 16 dry bulk vessels ranging between 33,000 and 85,000 dry-weight tonnage. 
• Private shipyards in the U.S. support $42.4 billion in GDP and employ over 107,000 direct workers, with the industry running a trade surplus in six out of the last ten years. 
• South Korean shipping line HMM suffered a cyberattack on its email system over the weekend, the latest in a string of attacks that pose threats to the global supply chain. 
• FedEx will begin testing self-driving vehicles in an effort to lower the cost of last-mile delivery. 
• General Motors will supply electric batteries and hydrogen fuel cell systems for Pittsburgh-based rail supplier Wabtec Corp’s electric locomotives. 
• Jaguar Land Rover will begin testing a hydrogen fuel-cell model of one of its vehicles later this year as the company looks to expand its fleet of zero-emission cars. 
• Our logistics team reports that bulk trucking firms are refusing to book long-haul, out of network loads due to extreme capacity constraints.
• Logistics conditions remain strained, with trucking demand exceeding availability and continued congestion at ports primarily due to increased volume of ships and containers. Clients are advised to provide expanded lead times on orders to help ensure delivery dates.

Markets

• The U.S. reported 11,304 new COVID-19 cases and 339 deaths on Tuesday. 
• New York lifted the majority of its pandemic restrictions yesterday on the news that 70% of its population had received at least one dose of a COVID-19 vaccine. After reporting the same milestone, Maryland will lift its COVID-19 state of emergency July 1. 
• Vermont dropped all pandemic restrictions after becoming the first state to vaccinate more than 80% of its population.  
• California reported no new COVID-19 deaths Sunday and Monday, the first time since the pandemic began. 
• A study of insurance records indicates that 23% of recovered COVID-19 patients suffer a variety of new health maladies after recovery, including nerve and muscle pains, breathing difficulties, fatigue, intestinal issues, heart abnormalities and elevated cholesterol and blood pressure levels.  
• Roughly 25% of infected people suffer long-term symptoms of the virus. 
• COVID-19 was likely active in five U.S. states between December 2019 and early 2020 before states reported virus data. 
• A clinical trial suggests that organ transplant recipients, who have attained limited protection from vaccines due to their suppressed immune systems, could benefit from a third shot. 
• A clinical trial of an AstraZeneca antibody cocktail is showing to be just 33% effective in preventing symptomatic COVID-19. 
• Clinical trials indicate that Regeneron’s antibody cocktail cuts COVID-19 death rates by 20%.  
• “The U.S. incurred a record $2.1 trillion deficit through the first eight months of the fiscal year, offset by a 29% rise in federal revenue for the period ending in May.
• The Federal Reserve Open Market Committee is scheduled to conclude a two-day policy meeting today, potentially ramping up plans to increase U.S. interest rates as soon as 2023. 
• U.S. manufacturing production rose by 0.9% from April to May on stronger vehicle production, overcoming supply and labor shortages and higher commodity prices. 
• U.S. housing construction rose 3.6% in May, while applications for new building permits fell by 3%.  
• An index of U.S. homebuilder sentiment has fallen to a 10-month low, dropping to 81 this month compared to 83 in May, signaling that higher material and labor costs are hampering demand for new homes. 
• The U.S. housing squeeze comes after two decades of underwhelming home construction, leaving the country roughly 5.5 million units short of needs. 
• Despite the pandemic, U.S. traffic fatalities rose to their highest level since 2007 last year:

• Ride-hailing company Lyft is partnering with utility company Peninsula Clean Energy to launch an electric vehicle rental pilot program for drivers around the San Francisco Bay Area. 
• Royal Caribbean delayed the inaugural sailing of its Odyssey of the Seas cruise ship from July 3 to July 31 after eight crew members tested positive for COVID-19.  
• The White House is working with China to lift its ban on Boeing’s 737 MAX planes, which the country grounded over two years ago as a result of two deadly plane crashes. 

International

• More than 176 million people have been infected with COVID-19 since December 2019, while more than 3.9 million people have died from the virus worldwide. 
• India reported 62,224 new COVID-19 cases and 2,542 deaths yesterday as many cities lifted their lockdown measures. 
• India will start producing doses of Novavax’s COVID-19 vaccine, which was shown to be 90% effective in clinical trials. 
• The Delta variant of COVID-19 first identified in India has spread to 74 countries, causing fears that it will become the dominant global strain. 
• South Africa has re-implemented pandemic restrictions after COVID-19 infections doubled the past two weeks, while hospitalizations were up 60%.
• The U.K.’s decision to extend its COVID-19 restrictions by another month could significantly harm small businesses and the restaurant and hospitality industry. The country reported 7,673 new COVID-19 cases and 10 virus deaths on Tuesday. 
• New COVID-19 cases in Moscow have grown by 80% over the past few days while virus hospitalizations in the city have increased by 70%. 
• Italy is seeing a slight uptick in COVID-19 cases, reporting 1,255 infections and 63 deaths on Tuesday, up from around 900 infections and 36 deaths Monday.   
• France’s health minister says that the highly transmissible Delta variant of COVID-19 represents 2%-4% of confirmed cases in the country. The country has begun inoculating children as young as 12. 
• Germany reported its lowest number of new COVID-19 infections since September of last year. 
• The World Health Organization is warning that COVID-19 is spreading faster than the global distribution of vaccines, highlighting an increased risk for those who are not vaccinated against the virus. 
• With a reported 91.6% efficacy, Russia’s Sputnik V COVID-19 vaccine may be more effective than other shots against the Delta strain of the virus. 
• The U.S. delivered more than 1 million Johnson & Johnson COVID-19 vaccine doses to Mexico yesterday. 
• The EU will lift non-essential travel restrictions from the U.S. and Saudi Arabia this week. 
• Tourism businesses throughout Canada are urging the country’s prime minister to relax its border restrictions with the U.S., hoping to rescue the country’s flailing travel industry.
• International tourism in Mexico was down 36% in April compared with the April 2019 level.  

Our Operations

• M. Holland’s 3D Printing group offers a rapid response alternative for producing selected parts where resin availability is tight during prevailing force majeure. For more information, email our 3D Printing team.
• 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.

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.