COVID-19 Bulletin: June 15

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Supply

• Oil prices rose to two-year highs on Monday as the global COVID-19 vaccine rollout continues to fuel an economic recovery. 
• Crude prices were higher in mid-day trading today, with the WTI up 1.7% to $72.08/bbl and Brent up 1.5% at $73.95/bbl. Natural gas was down 3.3% to $3.24/MMBtu.
• The International Energy Agency expects global crude oil demand to exceed pre-pandemic levels this year, increasing to 100.6 million bpd. 
• LNG exports from the U.S. last month exceeded Australia’s exports for the first time, with some experts expecting the U.S. to become the world’s largest exporter of LNG. Increased U.S. exports could help lower emissions in several Asian countries. 
• Six major western energy firms are hoping to take a stake in Qatar’s North Field expansion project aimed at boosting the country’s LNG exports. 
• A chemical fire at a Chemtool Lubrizol lubricants plant near Rockton, Illinois, yesterday morning forced the evacuation of surrounding residents and is expected to burn for days.  
• Spanish oil and gas company Respsol plans to issue green “transition” bonds to help fund its shift toward a more sustainable business model. 
• BP is joining Norway’s Statkraft and Aker Offshore Wind in bids to create new offshore wind projects off Norway’s coast.
• Our most recent list of force majeure and allocation announcements from suppliers is here. 

Supply Chain

• At least 12 southern and western states are under heat-related advisories, with daytime highs reaching 15-30 degrees above normal in one-third of the nation. Many areas are breaking previous record temperatures, while the risk of wildfires is high. 
• Power prices in California surged to their highest levels since February as the state battles a heat wave expected to continue through the rest of the week. 
• ERCOT, the main power distributor in Texas, is urging customers to conserve power and investigating why several power plants have been forced to shut down as potentially record-breaking heat approaches. 
• U.S. railroads originated 30% more carloads and 26% more intermodal containers in May compared with May 2020, straining rail networks. 
• Congestion at China’s Yantian port is delaying vessels by up to 16 days as port productivity drops to just 45% of normal levels. 
• Maersk has rerouted at least 79 vessels from scheduled calls at Yantian in the last three weeks, as a shutdown in critical port operations has created a shortage of empty 40-foot containers. 
• The cost of shipping a 40-foot container from Shanghai to Rotterdam is at a record $10,522, up 547% over the past five years. 
• German shipper Hapag-Lloyd is forecasting an extended peak season in 2021 amid continued strong demand, as the industry enters its busiest months of July and August in preparation for the holiday season. 
• FedEx Freight notified some 1,400 less-than-truckload customers that it will cease serving them to help relieve terminal bottlenecks, leaving them with little time to arrange for shipping alternatives.  
• More online retailers are selling other brands’ merchandise, a strategy to boost web traffic and revenue as the e-commerce boom continues.
• Spurred by an Amazon Air hub, Ohio’s Wilmington Air Park has increased its cargo volume nearly 300% since 2020 to become the third-largest cargo airport in the U.S. 
• E-commerce giants Amazon and Alibaba are significantly increasing the adoption of robots at warehouses and for last-mile deliveries.
• U.S. lumber prices suffered their biggest ever weekly drop last week, falling almost 40% from record-high levels reached in May. 
• The U.S. Air Force will establish a 3D-printed supply chain in Oklahoma following the U.S. Defense Department’s first-time air-worthiness certification of a 3D-printed aircraft engine part. 
• 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. surpassed 600,000 COVID-19 deaths on Monday as doubts grow about the White House’s goal to inoculate 70% of the population by July 4th. The country reported 12,710 new infections yesterday and 170 virus deaths. 
• California is fully reopening its economy today, lifting most capacity and physical distancing restrictions. The state is giving away free “dream vacations” to encourage vaccinations and bolster tourism, adding to other vaccination incentives such as lottery drawings and $50 gift cards.  
• Over 70% of New Yorkers have received at least one dose of a COVID-19 vaccine. 
• The Delta variant of COVID-19 first discovered in India is expected to become the dominant virus strain in the U.S., with the number of infections jumping from 2% to 10% of all new COVID-19 cases in the Southwest last week. 
• A new study shows that COVID-19 vaccines from Pfizer and AstraZeneca are highly effective in preventing hospitalization from the Delta variant of the virus. 
• UnitedHealthcare rescinded a plan to deny coverage for what it deemed non-urgent care at hospital emergency rooms after an outcry of concern that it would further delay people from seeking healthcare after pandemic lockdowns.  
• Apple will allow vaccinated customers to forgo mask-wearing inside many of its U.S. stores starting next week, while California’s Disneyland removed its mask mandate today.
• Goldman Sachs recalled most of its workforce back to the office yesterday, while Citigroup plans to wait until July. Only about 31% of office workers have returned to their pre-pandemic workspaces. 
• Amazon is expecting workers in the U.S. and the U.K. to return to the office at least three days a week beginning Sept. 7.
• As banks relaxed interest rates during the pandemic, corporate debt in the U.S. reached record levels, surging to over $11 trillion in March, half the size of the economy, with some analysts expecting companies to face new struggles when it is time to repay. 
• Producer prices jumped 6.6% year over year in May, the largest annual increase since 2010, while consumer prices slipped a higher-than-expected 1.3% after rising in prior months.  
• The U.S. and EU are set to resolve a 17-year trade fight over state subsidies given to Boeing and Airbus, significantly reducing trade tensions between the two nations. 
• Airbus and Boeing are facing increasing price competition from the surplus of used aircraft on the market that were idled during the pandemic.
• The CEO and CFO of electric-truck startup Lordstown Motors resigned on Monday amid alleged misrepresentations made to investors regarding preorders for its electric truck. 
• A drop in new car sales stemming from high prices for new vehicles and a staggering increase in the price of used cars has driven the average age of vehicles on U.S. roadways to a record 12.1 years. 
• California will need 1.2 million electric vehicle charging stations by 2030 to meet its target of ending internal combustion vehicle sales. 
• Wisconsin regulators approved new measures allowing electric utility customers to install and maintain electric vehicle charging stations in their homes or businesses as part of the state’s efforts to curb vehicle emissions. The state’s utilities are on track to reduce carbon emissions by almost 40% over the next six years. 
• Global ad spending is anticipated to rebound a greater-than-expected 19% this year after contracting 3.5% in 2020, with digital ad spending increasing 26%.  
• U.S. beauty retailer Credo Beauty has cut single-use plastics from its samples and packaging following a two-year phase out, as more retailers mull sustainability measures. 

International

• India reported 60,471 new COVID-19 cases and 2,726 deaths yesterday. 
• Multiple Indian states began easing COVID-19 restrictions as the number of new infections dropped to their lowest levels in nearly two months. The quick reopening could open the door to another surge in infections, officials say. 
• A rising number of new COVID-19 cases in Vietnam has prompted Ho Chi Minh City to extend social distancing measures for an additional two weeks. 
• South Korea started lifting some of its COVID-19 restrictions on Monday, increasing capacity at large concerts and sporting events as the country accelerates its vaccination drive. 
• Hospitals in Thailand have been forced to cancel some COVID-19 vaccine appointments due to a large shortage of shots. 
• The highly transmissible Delta variant of COVID-19 has Indonesia expecting a new wave of infections to peak in July, as hospital occupancy in the country’s capital reaches 75%. 
• China will begin inoculating adolescents as young as 13-years-old with COVID-19 vaccines.  
• The U.K., where 57% of adults are fully vaccinated, delayed a full reopening of the country by another month amid rising cases of the Delta variant of COVID-19. 
• Mexico’s health ministry estimates that over 30 million people, a quarter of the population, have been infected with COVID-19, 12 times the official tally.  
• Chile, with one of the highest COVID-19 vaccination rates in the world, extended its state of emergency through September as cases surge.  
• Less than 2% of Venezuelans have received at least one dose of a COVID-19 vaccine, one of the lowest rates in the world.
• A surge of COVID-19 infections in Afghanistan has pushed the country’s two main hospitals to capacity, forcing them to close their doors to new patients. 
• Africa will be prioritized to receive COVID-19 vaccine donations from the World Health Organization. 
• The World Trade Organization is urging member states to drop trade barriers related to medical supplies used against COVID-19, asking them to reach a deal by July to improve access to vaccines. 
• G7 leaders announced they are in favor of holding this year’s Tokyo Olympic Games scheduled for July. 
• Up to 7% of French firms could be in financial trouble when the government lifts pandemic support for businesses. 
• Hyundai is accelerating its efforts to develop air taxis powered by electric batteries that can transport five to six people from highly congested urban centers to airports. 
• G7 leaders stepped back from setting targets for electric vehicle sales in their countries, instead pledging to increase efforts to move away from internal combustion engines without a set date in mind. 
• Indonesia plans to sell only electric powered motorcycles by 2040 and only electric vehicles by 2050 as the country aims to lower its carbon emissions.
• Researchers from the University of Cambridge have discovered a method to incorporate nanoparticles into a plant-based polymer to create durable, compostable plastics using low energy. 
• A new study from the University of Cadiz, Spain, found that 44% of plastic litter in the world’s oceans comes from take-out food containers. 

Our Operations

• Resource Center: M. Holland offers a host of resources to clients, prospects and suppliers. To arrange a videoconference or meeting, contact:
  • Automotive: Market Manager Matt Zessin.
  • Color & Compounding: Market Manager Scott Arnold.
  • Electrical & Electronics: Market Manager Carlos Aponte.
  • Flexible Packaging: Senior Technical Development Engineer Todd Stevens.
  • Healthcare: Global Healthcare Manager Josh Blackmore.
  • International: Director of Business Development Tracy Coifman.
  • Rotational Molding: Product Manager Pete Nutley.
  • Wire & Cable: Director Todd Waddle.
  • 3D Printing: Market Manager Haleyanne Freedman.
  • Sustainability: Market Manager Debbie Prenatt.
  • For Regulatory advice, contact Regulatory Specialist Christopher Thelen.
  • For Technical questions, contact Paul Lorigan, Manager of the M. Holland Technical Innovation Center.
• 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.

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.