COVID-19 Bulletin: July 24

Good Afternoon,

More COVID-19 news relevant to the plastics industry:

Supply

• After slipping on Thursday, crude prices were higher in early trading with the WTI price at $41.39/bbl and Brent at $43.58/bbl.
• Schlumberger took a $3.7 billion charge against second quarter earnings and plans to cut 21,000 jobs. The oil services giant expects modest improvement in the third quarter.
• New fracking wells should climb above 400 this month, up from 325 in June, with the Permian Basin showing the most new activity. The summer curtailment of drilling activity is likely to result in a production slump in the fall, as new wells tend to lose half their output in the first year of production.
• Shale producers are facing a credit squeeze as a drop in oil and gas reserve values shrank the borrowing base for collateralized loans by 23% this spring, and banks remain cautious about lending in the space.
• Dow plans to cut its 36,500-employee workforce by 6%.
• Tropical Storm Hanna is expected to hit the Texas Gulf Coast on Saturday, and hurricane warnings were issued in some parts of the Caribbean in anticipation of Tropical Storm Gonzalo, which is strengthening in the Atlantic Ocean.

Supply Chain

• Canada’s crude-by-rail exports fell 63% in May from April’s level, hitting a four-year low.
• The U.S. Mint, citing pandemic-related issues in supply channels, appealed to the public to use more coins and make exact change to mitigate a coin shortage.
• We continue to experience challenges with truck deliveries, particularly LTL shipments, due to labor shortages and operational delays caused by COVID-19 protocols. Clients are advised to provide expanded lead times on orders to help assure delivery dates will be met.
• Beyond the transportation challenges, our Gold Standard logistics partners and U.S. ports continue to operate without interruption.

Markets

• As U.S. COVID-19 cases crossed the 4 million milestone yesterday, the pace of infection doubled in the last six weeks, with the most recent 1 million cases registered in just 15 days.
• COVID-19 deaths in the U.S. topped 1,100 yesterday for the third day in a row.
• The Senate failed to escalate a new economic relief package from committee to the floor for vote, with details regarding jobless subsidies and school funding unsettled. A vote is expected next week, not soon enough for millions of people whose current $600 unemployment subsidies expire this weekend.
• The four-month moratorium on renter evictions contained in the Coronavirus Aid, Relief, and Economic Security (CARES) Act expires today, putting the 12 million renters previously protected by the program at risk of eviction.
• More than half of respondents to a Kaiser Family Foundation survey say the pandemic is affecting their mental health, and most believe the worst impacts are yet to come.
• Revenues for the country’s largest airlines fell more than 80% in the second quarter. 

• Unilever’s demand for hand sanitizers soared 20,000% in the second quarter, and the company has expanded capacity by 600-fold during the pandemic, growing its manufacturing sites for hand sanitizer from two to more than 60.
• Testing labs are encountering shortages of plastic pipette tips and other lab supplies as COVID-19 cases rise and testing demand soars.
• Face masks are proving to be the most effective single method to ward off infection:

• Medical technology company Celsium has developed a medically approved, wearable temperature sensor that can continuously transmit body temperature data via Bluetooth to a mobile device.
• Hershey is moderating Halloween-themed candy production in anticipation of a disrupted trick-or-treat night, which accounts for about half of its Halloween sales.
• The back-to-school and upcoming holiday seasons will be critical to determining how many of the nearly 2 million unemployed retail workers will return to their jobs. About one-in-four U.S. jobs are connected to the retail industry.
• One New York COVID-19 patient nicknamed “Miracle Larry” was released from the hospital yesterday after 128 days, including 51 on a ventilator.
• At the current pace of growth, plastic pollution in oceans will triple by 2040, according to a recent study.
• The Department of Homeland Security is again giving New York residents access to its Global Entry and Trusted Traveler programs after suspending enrollment in February over immigration differences.
• Total U.S. COVID-19 deaths passed 144,000 yesterday.

International

• The German manufacturing sector broke a string of 19 consecutive months of contraction, with July’s Purchasing Managers’ Index inching to 50.0.
• The economic recovery in the Asia region may be stalling:
  • South Korea, Asia’s fourth largest economy, saw GDP contract by a larger-than-expected 2.9% in the second quarter as exports suffered the steepest drop since 1963.
  • A government think tank in Vietnam lowered its growth projections for the nation’s economy for 2020 to 2.1%, compared with previous government estimates of 3% to 4%.
  • Industrial output in Singapore in June increased just 0.2% over the prior month and was down 6.7% from June 2019.
  • Australia’s government warned that GDP will show a 7% contraction for the second quarter, the largest since WWII.
  • China’s recovery, fueled by aggressive government incentives, has been clouded by slow exports and heightened geopolitical tensions with the U.S., according to a Reuters’ poll.
  • We’re seeing strong demand in Asia, but are mindful of softening signals.
• China ordered the U.S. to close its consulate in the southwestern city of Chengdu in retaliation for the federal government’s shutdown of China’s consulate in Houston early this week.
• Brazil recorded nearly 60,000 new COVID-19 cases yesterday, its second highest daily infection rate, raising total infections to nearly 2.3 million.
• India reported 49,000 new COVID-19 cases yesterday, a daily record, and passed France to take sixth place among nations with the most deaths — nearly 31,000.

Our Operations

• To access 3D Printing training, order parts and seek technical assistance, visit our new online resource.
• 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.
• M. Holland’s official status statement is available here.

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.