COVID-19 Bulletin: August 12

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Supply

• The White House formally urged OPEC to increase its oil output, saying rising prices threaten the global economic recovery. Oil prices erased early losses yesterday following the announcement, closing more than 1% higher. 
• Energy futures eased in mid-day trading today, with WTI down 0.7% at $68.77/bbl and Brent down 0.7% at $70.97/bbl. Natural gas was 2.3% lower at $3.96/MMBtu.
• The International Energy Agency reported a 120,000 bpd demand slump month over month in July, while downgrading second-half growth forecasts by half-a-million bpd due to spreading global COVID-19 infections.
• U.S. road travel increased 14.5% in June compared to 2020 levels, fueled by a resurgence in rural driving and increasing numbers of employees returning to offices. 
• Deal-making in the oil and gas industry has jumped this year amid an increase in oil and gas prices. Most recently, Chesapeake Energy announced plans to buy rival Vine Energy for $615 million, banking on its proximity to the U.S. Gulf Coast export hub.
• Our most recent list of force majeure and allocation announcements from suppliers is here.  

Supply Chain

• Wildfires are continuing to spread across the U.S. West:
  • California’s Dixie Fire, the largest in state history, surpassed 500,000 acres with only 30% containment. 
  • Strong winds are spreading Montana’s Richard Spring Fire uncontrollably, forcing evacuations around the Northern Cheyenne Indian Reservation. 
  • With the blaze 96% contained, evacuations stemming from Southern Oregon’s Bootleg Fire are set to be lifted Monday. 
• Tropical Storm Fred continued to approach Florida Wednesday, passing through Puerto Rico and the Virgin Islands as Florida’s governor urged residents to review their disaster plans.  
• At least 65 people died in Algeria as wildfires continue to spread in the Mediterranean, with Greece hit particularly hard. The blazes come amid the region’s highest temperatures in decades, with Sicily recently breaking Europe’s all time high of nearly 120 degrees. 

• Operations at China’s Ningbo port, the world’s largest and third-busiest, were partially suspended Wednesday after a terminal worker tested positive for COVID-19. The pandemic-induced disruption was China’s second in a month after the closure of Yantian port in Shenzhen. 
• A worker strike at German railway operator Deutsche Bahn stretched into its third day, heavily disrupting passenger and cargo traffic across the country.
• Kansas City Southern de México reports that shippers are diverting deliveries away from Mexico’s Pacific ports after numerous blockades of local rail lines imposed by disgruntled teachers in a labor dispute. 
• U.S. manufacturer orders more than doubled in the second quarter of 2021 from the same time last year, yet invoices provided by suppliers have not kept pace, reflecting growing transportation difficulties and supply-chain backlogs. 
• Auto sales are down drastically in the U.K. since last year, a result of growing production disruption caused by the global semiconductor shortage:

• A new report by JPMorgan says that current global supply chain disruptions are causing an unprecedented inventory slump not typically seen outside of a recession. 
• Analysts report that the global shipping industry is seeing its biggest disruption in 65 years, evidenced by more than 350 container ships anchored outside ports around the world and a current 12-day delay for ships looking to enter the ports of Los Angeles and Long Beach.

Markets

• COVID-19 cases and hospitalizations in the U.S. are at their highest levels in six months, with the country averaging more than 110,000 daily infections this week, a 25.5% increase from the week prior. The CDC warned that virus hospitalizations could quadruple by Labor Day. 
• The U.S. reported 135,177 new COVID-19 infections and 342 virus deaths Wednesday. 
• There were 94,000 pediatric cases of COVID-19 over the past week, 15% of all new infections and the highest percentage of infections among children of the pandemic.  
• California is ordering all school employees to get vaccinated against COVID-19 or undergo regular testing, the first state to require such a mandate. In addition, the state’s healthcare facilities will now require all visitors to show proof of full vaccination or a negative COVID-19 test, while Los Angeles will require the same for entry into most public indoor spaces. 
• The pace of people receiving first COVID-19 vaccine doses has nearly doubled from a month ago, ending a monthslong decline as new infections pick up across the country. 
• Florida saw 24,753 new COVID-19 cases Tuesday, a record, alongside 14,787 total virus hospitalizations yesterday, 45% more than the July 2020 peak. The federal government provided the state with hundreds of ventilators and other health equipment, while the state’s governor threatened to withhold salaries from school leaders who enact mask mandates. 
• Mississippi’s seven-day average of new COVID-19 infections has increased tenfold in the past month, with virus patients now filling 47% of the state’s ICU beds and straining the healthcare system. The state’s largest hospital system has been forced to convert a parking lot into a COVID-19 ward and request additional medical professionals from the federal government.  
• Oklahoma reported 2,199 new COVID-19 cases Wednesday, while the state’s average number of virus hospitalizations rose to more than 1,100 for the past three days. 
• Louisiana reported 3,930 COVID-19 cases Wednesday, while 2,895 patients were hospitalized with the virus, a pandemic record. 
• Hawaii is reimposing capacity restrictions on businesses and social gatherings following a spike in COVID-19 infections and hospitalizations. 
• A pair of court rulings in Texas’ Bexar and Dallas Counties have cleared the way for local officials to impose mask mandates after the state’s governor issued an executive order banning them. 

• The FDA could soon approve third COVID-19 booster shots for high-risk immunocompromised people.
• The CDC added seven new destinations — Aruba, Eswatini, France, French Polynesia, Iceland, Israel and Thailand — to its highest-risk COVID-19 travel advisory. 
• More U.S. employers announced COVID-19 vaccine mandates, while other companies pushed back their return-to-office dates:
  • The New York Stock Exchange will require anyone entering its trading floors to be vaccinated against COVID-19 beginning Sept. 13. 
  • Amtrak will require all employees to be vaccinated against COVID-19 or undergo weekly testing starting Nov. 1. 
  • Capital One pushed back its return-to-office date by two months to Nov. 2 while also requiring all employees returning to its U.S. offices to be fully vaccinated against COVID-19. 
  • McDonald’s will require all U.S. corporate workers to be fully vaccinated by Sept. 27 and pushed back its return-to-office date to Oct. 11. 
  • NBCUniversal pushed back its return-to-office date until at least October over concerns of the Delta variant. 
  • Southwest Airlines, American Airlines and Delta Air Lines will not require employees to be vaccinated against COVID-19, breaking with a new mandate imposed by competitor United Airlines. 
• More than 2.5 million Americans purchased health insurance through online marketplaces after the White House extended the Affordable Care Act’s enrollment window due to the pandemic. 
• Liability insurers are lowering the amount of coverage they offer companies amid an expected surge in COVID-19-related claims stemming from more workers returning to offices. 
• First-time unemployment claims fell by 12,000 last week to 375,000, the third consecutive weekly decline.
• The U.S. job market continues to show strong signs of recovery, with the number of job openings climbing to an all-time high of 10.1 million in June, while layoffs dropped to a record low of 1.3 million: 

• Despite improving employment numbers, the hospitality industry continues to see broad labor shortages as more people hold off for better, safer or higher-paying jobs:

• U.S. home mortgage applications rose 2.8% last week as the average 30-year mortgage rate stayed below 3% for the second consecutive week.
• Southwest Airlines warned that the Delta variant of COVID-19 could threaten the company’s third-quarter profit, as spreading infections lead to increased flight cancellations among travelers. 
• The White House is mulling a 2050 target date for weaning aircraft off fossil fuels, a measure that could merge with broader efforts to combat climate change. 
• New government-directed spending is driving up demand for key materials needed for renewable technology, resulting in higher prices for metals and minerals in a dynamic dubbed “greenflation.” 

International

• More than 204 million people in 210 countries and territories have been infected with COVID-19 since the start of the pandemic, as the global virus fatality toll approaches 5 million.  
• India reported 38,353 new COVID-19 infections Wednesday as the nation holds talks with Pfizer, Moderna and Johnson & Johnson to procure tens of millions more vaccine doses over the next several months to help boost inoculation efforts. 
• Japan reported 15,812 new COVID-19 infections Wednesday, a record, despite administering more than 100 million vaccine doses and surpassing the U.S. in the proportion of its older population that is fully vaccinated. 
• Australia’s capital of Canberra, experiencing its first COVID-19 outbreak in more than a year, announced a snap one-week lockdown yesterday evening, as Sydney considers beefing up its military presence to help ensure compliance with restrictions. 
• New COVID-19 cases in France rose above 30,000 for the first time since April.  
• With only half of its population vaccinated against COVID-19, Switzerland is considering ending its free COVID-19 testing program for those who are unvaccinated. 
• Austria will begin administering third COVID-19 booster shots Oct. 17. 
• Israel reported 6,275 new COVID-19 cases Monday, the most since February.
• A new report from the Organization for Economic Development and Cooperation says that the global economic recovery may be slowing as the spread of the highly contagious Delta variant causes people to rethink how they spend their money. 

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.