COVID-19 Bulletin: June 29

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Supply

• Oil prices fell roughly 1.5% Monday as the Delta variant of COVID-19 continues to spread in Europe and Asia ahead of OPEC’s meeting on July 1. Despite the decline, oil prices are still up 9% this month. 
• Energy futures were higher in late morning trading, with WTI up 0.7% at $73.41/bbl and Brent up 0.7% at $75.19/bbl. Natural gas was 4.1% higher at $3.74/MMBtu.
• After soaring early in the pandemic with the collapse of oil demand and prices, the number of drilled but uncompleted oil and gas wells in the U.S. shale industry has declined 27% over the past year.
• Rising crude prices and higher federal taxes have driven diesel and gasoline pump prices to record highs in India, threatening the nation’s economic recovery. 
• U.S. operators have completed, started building or announced 19 petroleum liquids pipeline projects this year. 
• China has turned on the first two generating units of the world’s second largest hydroelectric dam, a bid to curb the country’s fossil fuel demand and quicken a shift to cleaner energy. 
• China’s plans to implement the world’s largest carbon trading market by June have been scrapped without definite plans for a new start date. 
• Employees of 60 Iranian oil companies have joined a strike over wages and contractual conditions.
• Our most recent list of force majeure and allocation announcements from suppliers is here. 

Supply Chain

• Today is expected to be the hottest yet of a blistering heat wave in the Pacific Northwest, with many cities and regions having already set new record temperatures: Portland topped 112 degrees on Sunday, a record, with over 6,300 people suffering power outages, while Seattle experienced temperatures over 100 degrees for three consecutive days.
• Temperatures in British Columbia reached nearly 116 degrees on Sunday, setting an all-time high for Canada. 
• At least 30,000 power customers were in the dark Monday, while several public transit systems were temporarily closed amid reports of roads buckling from the intense heat. 
• Some regions of the U.S. West are experiencing their worst drought in a century, as July Fourth celebrations are curtailed for fear of sparks igniting wildfires. The taste of Sacramento drinking water is changing as California rivers, streams and reservoirs dry up. 
• Saturday rain helped quell wildfires in Colorado, with warmer temperatures expected to dry out the state again this week. 
• Fire crews continued to make gains on containing wildfires across Utah Monday. 
• Authorities in Minnesota are concerned that extreme drought conditions will result in a more active wildfire season. 
• More than half of the U.S. is currently affected by drought conditions:

• Panama Canal authorities are developing a $2 billion plan to bolster the waterway’s infrastructure ahead of long-term climate threats. 
• Container freight rates continue to soar, surpassing $20,000/40-ft for routes from China to North Europe and $25,000/40-ft for routes from China to the U.S. West Coast. 
• Hong Kong-based Seaspan Corp. has ordered six new 15,000-TEU capacity ships, bringing its newbuild order to 45 ships since December 2020.
• Canadian border officers are voting on a strike authorization after going without a contract since 2018, a development that could disrupt billions in cross-border trade with the U.S.  
• The U.S. Postal Service is mulling a plan to carry more packages by truck instead of plane, a move that would sacrifice speedy shipments for enhanced on-time delivery. 
• Best Buy announced a preliminary plan to spend $1.2 billion on diversifying suppliers, as the company’s five largest suppliers currently account for roughly 57% of store merchandise. 
• SoftBank will cut nearly half of its 330 staff positions in France as the company scales back investments in the logistics-robotics industry.
• Verizon expects its nascent 5G network to significantly improve the way robots communicate and work with each other. 
• 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

• The U.S. reported 15,083 new COVID-19 cases and 150 deaths Monday.
• The highly transmissible Delta variant of COVID-19 now accounts for over 20% of new U.S. infections, with health officials warning of a potential surge in low-vaccinated states including Alabama, Arkansas, Louisiana, Mississippi and Wyoming. 
• COVID-19 hospitalizations in Mississippi surpassed 800 for the fourth day in a row, as the state now has the highest COVID-19 infection rate in the U.S. 
• The Delta variant of COVID-19 now makes up 14.5% of new infections in California, up from 4.7% in May. Los Angeles County is urging people to wear masks indoors and in public places again, but has stopped short of a mandate. 
• Only about one-third of young adults aged 18-39 have been vaccinated against COVID-19. 
• New York reported just three COVID-19 deaths Monday, the lowest since September 2020. 
• A new study suggests Pfizer/BioNTech and Moderna COVID-19 vaccines could offer protection for a number of years while health officials debate whether those who received Johnson & Johnson’s single-shot vaccine will need a booster jab. 
• The U.S. donated its first batch of Pfizer/BioNTech COVID-19 vaccines abroad yesterday, sending 2 million doses to Peru, with plans to ship more doses through international vaccine-sharing group COVAX. 
• The FDA revised its fact sheets for Moderna and Pfizer COVID-19 vaccines to include the extremely low risk of heart inflammation seen in some people after their second dose. 
• New research shows that unmanaged diabetes plays a key role in both the severity and complications from COVID-19, with the American Diabetes Association reporting that roughly 40% of people who died from the virus had diabetes. 
• U.S. consumer demand is expected to lift output in other economies including Japan, China and the eurozone by up to 0.5% over the next 12 months, a trend boosted by the nation’s approval of record stimulus dollars following last year’s economic crisis. 
• The U.S. will likely become the world’s top destination for foreign investment this year and next, the United Nations projects, after a roughly 40% decline in investment from 2019 to 2020. 
• Low-wage workers in the U.S. are attracting more bonuses, raises and competing offers as a labor shortage tips the scales in favor of American workers.
• Dealerships are increasingly selling new cars at thousands above the posted sticker price amid limited supply and surging demand. 
• The TSA screened more than 2.1 million passengers for air travel on Saturday, the most since the beginning of the pandemic. 
• Boeing is not likely to get approval for its new 777 wide-body jet until 2023, federal regulators say. 
• United Airlines is set to purchase up to 270 narrow-body jets worth roughly $30 billion, the industry’s biggest aircraft order since before the pandemic. The airline is expected to post positive income in the month of July for the first time since January 2020. 
• Volvo will make its South Carolina factory its first all-electric vehicle assembly plant as the company plans to go fully electric by 2030.
• Honda announced that its first battery electric vehicle will be called the Prologue and will launch in the U.S. in 2024. 

International

• The World Health Organization is pushing for people to continue wearing masks and social distancing amid the global spread of the highly transmissible Delta variant of COVID-19.  
• The U.K. recorded 22,868 new COVID-19 cases Monday, its highest number of new infections since January. Hong Kong, Spain and Portugal imposed new restrictions on incoming travelers from the U.K., citing fears of the COVID-19 Delta variant.
• The U.K. says it is on track to lift the bulk of its remaining COVID-19 restrictions July 19. 
• Scotland recorded 3,285 new COVID-19 cases on Monday, its largest increase in daily infections since the start of the pandemic.
• Russia reported 652 new COVID-19 deaths Tuesday, a record. 
• The Delta variant of COVID-19 is spreading rapidly in Africa, leading to a shortage of critical medical supplies and ICU beds. South Africa, Morocco, Tunisia, Ethiopia and Egypt have the most infections, as the continent’s total case count surpassed 5.4 million. 
• South Africa will tighten its pandemic restrictions for the next 14 days to fight off a recent surge in COVID-19 infections.
• India may begin vaccinating children as young as 12 against COVID-19 next month, as the nation reported 37,566 new COVID-19 cases and 907 virus deaths Tuesday.
• Pandemic lockdowns in Malaysia have been extended indefinitely amid the continued spread of COVID-19.
• Indonesia reported 20,694 new COVID-19 infections Monday as the nation prepares to enter stricter lockdowns. 
• Fiji, with a population of fewer than 1 million, is reporting roughly 300 new COVID-19 cases per day. 
• Iran reported 12,000 new COVID-19 cases and 140 deaths Monday amid a fifth wave of the virus.
• Roughly 80% of Australians are in pandemic lockdowns as the nation’s government boosts vaccine mandates for several categories of work. 
• Japan announced COVID-19 quarantine and testing rules for incoming athletes of this summer’s Olympic games. 
• Taiwan reported its first domestically transmitted case of the Delta variant of COVID-19 Saturday alongside its lowest number of daily infections in more than a month. 
• Israel will not reimpose pandemic restrictions despite a recent rise in COVID-19 Delta variant infections. 
• The EU handed out the first payments of its nearly $1 trillion pandemic recovery fund for member countries hit hard by the pandemic. 
• North America beat the Asia-Pacific region in the growth of high-net-worth people for the first time in five years during the pandemic.
• With nearly 40% of European workers switching to remote work during the pandemic, the bloc will begin updating its worker safety rules to reflect various new understandings of physical, psychological and social conditions. 
• Synchrony Financial, bucking return-to-office mandates among major banks, is adopting a remote work model and downsizing offices, while UBS will allow up to two-thirds of its staff to adopt a hybrid model of working from both home and the office as the pandemic recedes. U.K. retail shopping activity remains 25.3% below 2019 levels. 
• Canadian aerospace companies are facing a labor crunch as they struggle to hire back workers to meet the recent travel rebound. 
• Chinese universities are working to set up new schools and departments that focus on semiconductors, hoping to boost the country’s ability to become self-sufficient in the chip market. 
• Siemens announced a new goal of hitting net-zero operations by 2030 along with a net-zero supply chain by 2050. 

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.