COVID-19 Bulletin: July 9

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Supply

• Oil prices rose roughly 1% Thursday after larger-than-expected drops in U.S. crude and gasoline inventories. Energy futures were higher in mid-day trading, with WTI up 2.5% to $74.74/bbl and Brent up 2.2% to $75.76/bbl. Natural gas was 0.7% higher at $3.71/MMBtu.
• Activity in the U.S. fracking industry has remained unusually low as producers use a cash surplus to pay down debt rather than boost output. 
• Despite energy demand falling 4.5% and oil demand dropping 9.3% in 2020, the pandemic-induced disruptions do not meet the substantial behavioral changes required for global climate goals, BP says. 
• Roughly 17 gigawatts of solar capacity will be added to the U.S. power sector in 2022 compared to just 6 gigawatts for wind, marking the first time solar growth will eclipse wind, the Energy Information Administration says. 
• Mexico’s president announced plans to create a state-owned LP gas distribution company to add competition in the market in a move met with concern among private competitors.  
• Our most recent list of force majeure and allocation announcements from suppliers is here.  

Supply Chain

• Winds in excess of 45 mph forced multiple states to issue tropical storm warnings yesterday as Elsa tracked a path up the Eastern Seaboard from Florida. The storm triggered tornado warnings in Delaware and New Jersey early today as it moved into the northeastern U.S. 
• The U.S. West is bracing for another heat wave over the next week, with triple-digit temperatures expected to impact roughly 28 million people in parts of California, Nevada and Oregon. 
• Washington state updated its official death count from last week’s heat wave to at least 78 people, with experts estimating 1 billion marine animals died off Vancouver’s coast as a result of the extreme high temperatures. 
• Ford expects to lose 50% of planned second-quarter production because of suspensions at multiple factories in July caused by the ongoing semiconductor shortage plaguing the industry. 
• China’s auto sales fell 12.4% in June from the same time last year after a loss in vehicle production from the global chip shortage.
• Great Britain’s GDP expanded a weaker-than-expected 0.8% in May, led by a 16.5% decline in vehicle manufacturing and shortages of timber and steel for construction projects. 
• Shippers Hapag-Lloyd and Maersk are warning of continued delays at the Port of Vancouver after wildfires in western Canada disrupted Canadian National and Canadian Pacific rail services. 
• Port Houston awarded a $99 million contract to add cargo capacity to its Bayport Container and Barbours Cut terminals. 
• South Korea’s port city of Busan, which handles 75% of all shipping for the country, is facing increasing congestion and delays caused by recent disruption at Chinese ports. 
• The average lead time for production materials rose from 85 days in May to 88 days in June, its highest since 1987, with researchers expecting even longer lead times in the months ahead. 
• Airfreight demand rose 36% year over year in June to roughly pre-pandemic levels, while airfreight capacity also grew substantially year over year but remained 22% below 2019 levels. 
• The average container detention and demurrage charge has nearly doubled in the past year to over $660. 
• A composite index for eight major global trade routes shows that average container rates rose to $8,796 last week, up 333% from the same time last year. 
• DHL Express will invest more than $360 million in facilities and new air capacity for the Americas region to accommodate surging e-commerce activity. 
• South Korea plans to invest $35 billion in the electric vehicle battery industry by the end of the decade, hoping to compete with China and Japan as an industry force. 
• Bed Bath & Beyond has countered supply chain constraints by using artificial intelligence and cutting underperforming brands, reporting an in-stock level of roughly 95%. 
• Walgreens has expanded its same-day delivery service to nearly all of its locations, except in California. The company also plans to add nine micro-fulfillment centers across the U.S. for prescription delivery, bringing its total to 11. 
• Our logistics team reports that bulk trucking firms are often declining 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

• U.S. COVID-19 cases rose 11% in the past week, with the majority of cases among unvaccinated people, while virus hospitalizations rose 6.8%. 
• The U.S. reported 20,061 new cases and 257 deaths yesterday. 
• The Delta variant of COVID-19 now accounts for 51.7% of infections in the U.S., making it the country’s dominant strain, while a new study shows that it can evade antibodies that target certain parts of the virus, raising risks of breakthrough infections in fully vaccinated people. 

• Spread of the COVID-19 Delta variant will likely lead to a resurgence of U.S. infections this fall and may expose victims to double the risk of hospitalization compared with the Alpha variant, according to studies. 
• Officials at the FDA and CDC reiterated that people fully vaccinated against COVID-19 do not need a booster shot at this time, while Pfizer pressed for regulatory approval for a booster tailored to the Delta variant. 
• COVID-19 vaccines are estimated to have prevented 280,000 additional U.S. deaths and millions of hospitalizations. 
• After COVID-19 Delta variant cases jumped by more than 25% in Southwest Florida over the past week, experts fear the strain will cause a new outbreak in unvaccinated people as it becomes the state’s most prevalent variant. 
• COVID-19 cases in California are rising for the first time in several months, with the state reporting 1,143 new daily infections over the seven-day period that ended Tuesday, a 30% increase from mid-June. The infection rate in Los Angeles county jumped from 1.74 to 3.5 cases per 100,000 people in one week. 
• More than 125 students and adults tested positive for COVID-19 after returning home from a Texas church summer camp in June, prompting fears of a new outbreak in the state, while hospitals in the North Texas region are reporting a 47% rise in virus hospitalizations the past month. 
• COVID-19 cases in Oklahoma continued to rise, with the state reporting 456 new infections yesterday.
• Hawaii further relaxed its COVID-19 travel restrictions Thursday, allowing fully vaccinated people from the continental U.S. to enter the state without pre-travel testing or quarantining upon arrival. 
• Alaska’s COVID-19 case numbers are continuing to improve, with the state reporting just 214 new infections over the last five days and zero virus deaths Wednesday.
• New COVID-19 infections across Maryland, Virginia and the Washington, D.C. area are at their lowest since March 2020, with all three areas having at least 70% of their population fully vaccinated.
• After reporting a 30% rise in COVID-19 infections over the past two weeks, Arizona crossed a major milestone yesterday, reporting at least one vaccine dose in half its population. 
• New data shows children face a low risk of severe illness and death from COVID-19 despite increased spread of virulent strains. 
• The World Health Organization is monitoring a new strain of COVID-19, known as the Lambda variant, first discovered in Latin America and now identified in 26 countries. 
• The highly unusual U.S. labor shortage amid record job openings comes as people are looking for more remote work opportunities and may not be qualified for industries with rapid technology advancement.
• Despite the U.S.’s significant progress against COVID-19, the White House said it is not ready to lift restrictions on international travel to the country amid rising variants of the disease. 
• A surge in U.S. travel fueled by progress against the pandemic has pushed the country’s hotel revenue past pre-pandemic levels, with revenue per available room increasing by 5.7% last week compared to the same week in 2019. 
• Airbus delivered 297 new airplanes in the first half of 2021, a 51.5% increase compared to the same time last year. 

International

• India’s prime minister made a sweeping revamp of the administration following criticism of the country’s COVID-19 response. The nation reported 43,393 new cases and 911 deaths Friday. 
• Indonesia will expand pandemic emergency measures to 15 cities as new COVID-19 cases surged to 38,124 Friday, with 871 virus deaths. 
• Tokyo’s Summer Olympics will be held without spectators after Japan’s administration imposed a new pandemic state of emergency until Aug. 22. 
• South Korea will impose its strictest virus curbs in the Seoul metropolis following a record daily spike of 1,316 new COVID-19 cases. The nation also inked a vaccine swap deal with Israel for 700,000 shots. 
• Thailand is imposing new restrictions on travel, retail and gatherings alongside a two-week stay-at-home order amid rising COVID-19 cases. 
• Singapore will allow people who received China’s Sinovac COVID-19 vaccine to receive two doses of either the Moderna or Pfizer shot, a bid to offer its residents better protection against the virus. 
• Portugal recorded more than 3,000 new COVID-19 infections Wednesday, its highest since February and a 40% jump compared to last week, while travelers face stricter requirements for staying at the nation’s hotels.
• New COVID-19 infections in the Netherlands doubled in two weeks to roughly 8,000 for the week ending July 6.
• Despite reporting a renewed rise in COVID-19 infections after two months of steady decline, with 985 new cases Thursday, Germany will donate all of its remaining AstraZeneca COVID-19 doses to less developed countries in August. 
• Germany declared all of Spain a COVID-19 risk after the country’s infection rate more than doubled over the past week. 
• The U.K. will relax some of its COVID-19 restrictions, allowing those who are in close contact with an infected person to skip self-isolation if they have been fully vaccinated, while also allowing fully vaccinated international travelers to return home from moderate COVID-19-risk countries without needing to isolate. 
• The U.K.’s chief medical officer warned that so called “long COVID” will surge in the country’s younger population due to the demographic’s low vaccination rates. 
• The U.S. will send 500,000 doses of Pfizer’s COVID-19 vaccine to Uruguay as part of a continued effort to increase distribution to Latin American nations. 
• Africa reported 251,000 new COVID-19 infections for the week ending July 4, a 20% increase from the week prior. 
• Growth in Chinese exports slowed in June from the previous month, rising 23.1% compared to a year earlier following virus outbreaks and regional port disruptions, while produce prices in the nation peaked and started to ease in June. 
• German airline Lufthansa is planning to reactivate most of its travel routes by September. 
• The EU implemented a new law requiring all 27 member states to enforce guidelines banning 10 commonly consumed single-use plastics, including straws, plastic bottles, coffee cups and takeaway containers. 

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.