COVID-19 Bulletin: April 20

Good Afternoon,

More COVID-19 news relevant to the plastics industry:

Supply

• The WTI crude price suffered a historic collapse today, ending over 300% down and $-36.76/bbl on concerns about limited storage capacity. WTI June futures remained above $20/bbl, and Brent crude was down 8% at $26.

• A flotilla of tankers is en route to the Gulf Coast from Saudi Arabia, threatening further near-term aggravation to storage, pricing strains and Canada’s oil industry. The shipment equates to seven times typical Saudi monthly exports to the U.S.
• The active rig count in the U.S. fell by 73 to 529, the lowest level since 2016, according to Baker Hughes.
• Predicting U.S. drilling activity will fall 40-60% in the second quarter, oil services giant Schlumberger announced workforce reductions, facility closings and a 75% dividend cut.
• Pemex, Mexico’s state-owned oil company, faces a 20%+ drop in offshore investment due to the energy recession, according to IHS. Credit-rating agencies Fitch and Moody’s lowered the company’s rating into junk territory earlier this month.
• Liquefied natural gas is at price parity with coal in Asia, accelerating a shift from coal to gas for energy production in the region.

Supply Chain

• The trend toward mega ships in the container industry has backfired, as shippers are forced to cancel sailings and sail with partial loads.
• Our Gold Standard logistics and transportation partners continue to operate without disruption.
• There has been no status change with ports:

Markets

• Nearly 60% of Americans surveyed in a WSJ/NBC poll are concerned about prematurely reopening the economy, as disarray has hampered progress to widescale testing. 
• Test shortages and privacy concerns loom as obstacles for companies that want to conduct COVID-19 testing as part of their return-to-work protocols.
• After the exhaustion of the Paycheck Protection Program (PPP) last week, Congressional leaders and the White House drew closer to agreement on more funding for small businesses in a $450 billion deal that will include money for hospitals and expanded testing.
• Shake Shack is returning its $10 million PPP loan after criticism that 25% of the initial $350 billion in funding went to only 2% of applicants — including larger businesses that exceeded the qualification threshold of fewer than 500 employees, with some approved for more than the $10 million loan ceiling.
• People receiving benefits from workshare programs, which pay partial unemployment benefits to employees whose hours have been reduced, tripled in late March but remain a small portion of overall unemployment recipients. More than 20 states offer workshare.
• P&G’s sales rose 7% in the first quarter on brisk demand for consumer staples and healthcare products.
• In a Securities and Exchange Commission filing, department store Nordstrom warned that that it faces distressed finances if the COVID-19 shutdown is prolonged.
• As it prepares to open factories in Europe, Volkswagen has issued more than 100 policy changes, including a ban on carpooling, daily self-administered temperature checks by employees, and closure of company cafeterias.
• The COVID-19 crisis is having a positive environmental impact:

International

• European nations are taking a slow and piecemeal approach to reopening their economies, with many closed businesses beyond saving.

Our Operations

• Our 3D Printing team and Mployee volunteers donated their first shipment of face masks to Decatur Memorial Hospital in Indiana from a makeshift manufacturing center in our Northbrook, Illinois, Mployee cafeteria.

• To access 3D printing training, order parts and seek technical assistance, visit our new online resource.
• M. Holland is open for business, deemed essential and will continue to operate at full capacity. We have issued the following status statement:

In accordance with the guidance provided by the U.S. Department of Homeland Security Cybersecurity & Infrastructure Security Agency (CISA), M. Holland Company is considered a member of a critical infrastructure industry and will therefore remain operative. As such, with any necessary accommodations made to ensure the health and safety of our staff and business partners, we will continue to fully perform our normal business operations.

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.