COVID-19 Bulletin: July 22

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Supply

• Oil prices rebounded more than 4% Wednesday despite news of an unexpected rise in U.S. inventories. Crude futures were higher in morning trading, with WTI up 0.8% at $70.85/bbl and Brent up 0.8% at $72.28/bbl. Natural gas was 0.6% lower at $3.94/MMBtu.
• Gas use is back to pre-pandemic levels in many of the biggest oil-consuming countries, while analysts predict peak gas and diesel consumption will arrive four years sooner than expected in 2027, a result of increased adoption of electric vehicles.  
• China released 22 million barrels of its oil reserves to refineries in an attempt to rein in surging commodity prices. 
• Hackers are demanding $50 million in ransom from Saudi Aramco following a data breach that released client data held by third-party contractors, the company confirmed. 
• Japan unveiled a plan to cut LNG’s share of the country’s energy consumption from 37% currently to just 20% by 2031.
• Royal Dutch Shell is appealing a landmark Dutch court decision requiring the company to quicken its pace of emissions cuts, arguing the order unfairly targets a single company. 
• CPChem is developing new technology that would recycle pyrolysis oil from plastic waste as feedstock for the company’s cracking, the most important process in the production of gas and diesel fuel. 
• Corporate demand for power sourced from clean electricity is declining for the first time as more employees work from home, setting many businesses’ climate goals back by years. 
• Our most recent list of force majeure and allocation announcements from suppliers is here.  

Supply Chain

• Wildfires are continuing to impact various areas across the western U.S. and Canada:
  • The mid-Atlantic and Northeastern U.S. states have started issuing air quality advisories due to smoke from the wildfires spreading across the country, with shrouded skies being seen over New York City. 
  • Oregon’s Bootleg Fire, the nation’s largest, expanded to nearly 400,000 acres Wednesday with only 32% containment. 
  • Officials ordered more evacuations and closed highways in California following the spread of South Lake Tahoe’s Tamarack Fire. 
  • British Columbia declared a state of emergency and issued dozens of evacuation orders due to almost 300 wildfires spreading rapidly throughout the Canadian province. 
  • California utility PG&E will spend $20 billion burying 10,000 miles of power lines underground in an effort to reduce the risk of starting blazes. 
• At least 33 have died from historic flooding in China’s industrial Henan province, which has also displaced more than 200,000 people, collapsed homes and other structures, and disrupted the operation of rails, roads, dams, and reservoirs. More rain is expected in the region. 
• Despite an increased rate of severe weather events, overall natural disaster costs are on pace to decline in 2021:

• The CEO of Stellantis expects the global chip shortage to continue hampering auto production through 2022, while Volkswagen’s Skoda unit canceled several production shifts over the first two weeks of August. 
• Almost half of the $259 billion in cargo at the Port of Los Angeles involves China and Hong Kong, with monthly trade between the U.S. and China rebounding from pandemic lows to all-time highs. 
• Freight overflows led J.B. Hunt to temporarily suspend less-than-truckload service to some 1,400 clients in the second quarter, a similar move to that undertaken by FedEx in recent months.
• Uber Freight is acquiring logistics solutions company Transplace for $2.25 billion.  
• Demand for cardboard boxes and wood pallets surged in the second quarter amid continued high levels of e-commerce activity, pushing prices to record highs. 
• Canadian National Railway saw a 14% jump in quarterly revenue compared to the same time last year, fueled by strong orders for metals, lumber and oil. 
• Real estate company JLL expects global logistics warehouse demand to continue surging through at least 2024 on sustained high levels of e-commerce activity. 
• Logistics firm Prologis signed 168 new e-commerce leases in the first half of 2021, up from 53 in the same period last year, led by increased demand from major companies including Amazon and Walmart. 
• The EU rejected Britain’s demand for a revamped post-Brexit trade deal involving Northern Ireland, which remained in the EU customs area despite being part of the U.K. 
• Walmart formed a new partnership with robotics company Symbotic to outfit 25 of its distribution centers with automated end-to-end processing over the next several years. 

Markets

• Average daily COVID-19 cases in the U.S. jumped 66% week over week, led by increased Delta variant infections among unvaccinated people. Roughly 28% of the nation’s population currently lives in counties with government-designated “high” COVID-19 risk. 
• The U.S. reported 52,032 new COVID-19 cases and 333 deaths Wednesday. 
• More than 2,600 people in Illinois are currently infected with the Gamma variant of COVID-19, a strain first identified in Brazil with comparable rates of infection and hospitalization to the Delta variant. The number of Gamma cases is roughly six times greater than that of Delta in the state. 
• Chicago added Florida, Louisiana, Nevada and the U.S. Virgin Islands to its COVID-19 travel advisory, while the city’s mayor warned that pandemic restrictions may be reinstated amid rising infections. 
• COVID-19 hospitalizations in California surged to 2,164 Monday, the most since April, with 552 patients in ICUs. 
• A hospital in Houston, Texas, reported the state’s first case of the Lambda COVID-19 variant, a highly transmissible strain first detected in Peru.
• Las Vegas officials will not reimpose a mask mandate for tourists on the Strip, despite the state reporting more than 1,000 COVID-19 cases Tuesday, the most since January. 
• Wisconsin reported 451 new COVID-19 cases Tuesday, its largest single-day jump in two months. 
• Massachusetts is averaging 268 new COVID-19 cases per day, a 472% increase over the last two weeks, with the state also reporting more than 5,000 “breakthrough” infections in fully vaccinated people. 
• Some hospitals in the Kansas City region are turning away patients due to a recent surge in COVID-19 cases. 
• Virginia is asking students, teachers and school staff to wear masks indoors regardless of vaccination status. 
• New York City will require all public hospital employees to be vaccinated against COVID-19 or undergo weekly testing amid a rise in the city’s infections. 
• Land borders between the U.S., Canada and Mexico will stay closed to non-essential travel through at least Aug. 21 as a result of ongoing COVID-19 infections. 
• U.S. health insurer Anthem warned of higher COVID-19 costs coming in the second half of the year as a result of new and emerging variants. 
• First-time unemployment claims unexpectedly jumped by 51,000 last week to 419,000.  
• Economists are keeping projections for robust U.S. economic growth in the second half of 2021, forecasting little disruption from rising COVID-19 Delta variant cases. 
• The supply of entry-level housing in the U.S. is nearing a five-decade low, forcing many buyers out of the market as the average size of newly built single-family homes continues to grow. 
• Rental prices for single-family homes in the U.S. rose 6.6% in May compared to a year earlier, further adding to concerns that the nation’s housing boom could lead to higher inflation. 
• Whirlpool reported a 32% revenue increase in its latest quarter and raised guidance for the year on “sustained consumer demand” for appliances.  
• Back-to-school spending is expected to reach record highs this year.  
• A resurgence in air travel narrowed losses for United Airlines in second quarter revenue, while American and Southwest airlines reported a return to profitability in the period.  
• A low supply of new luxury vehicles is pushing the high-end used car market to new levels, with Bentley and Rolls-Royce both reporting record increases in pre-owned vehicle sales. 
• Tesla announced plans to open its global network of 25,000 superchargers to other electric vehicle brands later this year. 
• Ford and partner Argo AI will roll out a self-driving ride-hailing service with Lyft in Miami and Austin later this year, with plans to expand the service to six more U.S. cities in 2023. 

International

• Roughly 6.2% of the U.K.’s adults are suffering from “long Covid,” where symptoms of the virus persist for months on end. On Wednesday, the nation reported 44,081 new cases and 73 virus deaths, as supermarket stores sold out of essential items after hundreds of thousands of people were alerted to stay home due to contact with an infected person. 
• After reporting a record 1,383 COVID-19 deaths Wednesday, Indonesia will expand virus testing in dense urban areas to better track and prevent outbreaks. 
• A nine-case COVID-19 cluster emerged in the Chinese city of Nanjing, prompting city-wide testing and restrictions on travel. 
• South Korea reported 1,784 new COVID-19 infections Tuesday and 1,838 Wednesday, two consecutive days of records.
• Despite recent lockdowns, Australia’s two largest states reported increases of 32 and 13 COVID-19 infections from the prior day. 
• With opening ceremonies for the Tokyo Olympics set for Friday, COVID-19 cases in Japan are rising in what looks like a fifth wave of the virus:

• Japan granted emergency approval to Regeneron’s COVID-19 antibody cocktail to help treat those infected with severe COVID-19. 
• Croatia announced compulsory COVID-19 tests for travelers coming from the U.K., Russia and Cyprus, hoping to quell a recent rise in infections. 
• France began enforcing strict new COVID-19 protocols Wednesday, requiring people to show either a health pass or proof of a negative test to access most leisure activities. 
• Excess deaths in South Africa have risen to more than 203,000 since the start of the pandemic, more than triple the country’s official COVID-19 death toll. 
• The Ivory Coast will purchase 3.5 million doses of Johnson & Johnson’s COVID-19 vaccine by December in a bid to vaccinate 60% of its population, while Burkina Faso received half of a U.S. donation of 300,000 of the shots.
• The director of the World Health Organization says that COVID-19 can be beaten if at least 70% of every nation’s population is vaccinated by mid-2022. 
• Roughly 43% of British office workers are looking for cash incentives before returning to full-time in-person work, a London survey shows. 
• Volkswagen predicts sales of its electric vehicles in China could pick up significantly to around 80,000 in the second half of 2021, up from the 6,000 vehicles sold in July. 
• Second-quarter profit at South Korea’s Hyundai rose to $1.6 billion, the most in six years, on higher sales of SUV models and luxury Genesis vehicles. 
• Airbus delivered its first A350 wide-body jet from its Tianjin assembly line to China Eastern Airlines, further increasing its footprint in China. 
• Israel announced plans to instate double taxes on single-use plastics in the country, part of a plan to reduce consumption by 40%. 

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.