COVID-19 Bulletin: April 6
April 6, 2021 • Posted in Daily Bulletin
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Supply
- Oil prices fell the most in two weeks yesterday amid new lockdowns in Europe and increased Iranian supply, ending the day nearly 5% lower.
- Crude futures were higher in early trading today, with the WTI up 1.7% at $59.62/bbl and Brent 1.5% higher at $63.10/bbl. Natural gas was 2.0% higher at $2.56/MMBtu.
- Goldman Sachs predicts OPEC+ will need to put another 2 million bpd of oil on the market in the third quarter after a strong pickup in demand over the summer.
- A surge of COVID-19 in India threatens to further weaken the top importer’s demand for oil following a 5% drop in consumption in February.
- Total U.S. energy consumption fell 7% last year from 2019, the largest drop on record in both absolute and percentage terms.
- Chinese chemical giants Sinochem and China National Chemical are set for a merger, creating another supersized state-run company worth roughly $150 billion.
- Oil transports and rates for medium-range tankers are soaring on surging Chinese exports and rising U.S. Gulf flows.
- BP signaled that the oil price recovery has put it back on track to meet debt reduction targets and resume share buybacks.
- Our most recent list of force majeure and allocation announcements from suppliers is here.
Supply Chain
- The cargo ship bottleneck at the ports of Los Angeles and Long Beach reached a six-month anniversary yesterday, marked by an increase to eight days for the average wait to offload containers.
- Logistics provider DHL says air freight demand is at a “very high level” following the Suez Canal blockage, putting further pressure on already tight capacity, which also prompted Maersk to suspend spot bookings and short-term contract shipments from many export markets.
- Egypt could file a claim for up to $1 billion in damages from the Suez Canal blockage.
- Subaru will shut a Japanese plant between April 10-27, the latest automaker to announce production cuts due to the global semiconductor shortage.
- The global semiconductor shortage hobbling the automotive and electronics industries is centered around the most basic display and power chips, which provide limited but essential functionality.
- The Alliance for Auto Innovation has asked the U.S. Commerce Department for funding to help expand semiconductor production after warning that the global chip shortage could last another six months and result in 1.28 million fewer vehicles built this year.
- Airbus is polling airlines over a potential conversion of its out-of-favor A380 double-decker planes into freighters to take advantage of demand for e-commerce shipping.
- Amazon is considering opening permanent and pop-up retail outlets to cycle through unsold inventory from its warehouses.
- The pandemic’s shift to less crowded roads has significantly boosted rates of distracted driving, prompting the trucking industry to back a legislative effort to boost enforcement of state driving laws.
- Copper prices gained the most in six weeks following a better-than-expected jobs report late last week and the decision by Chile, the world’s top copper exporter, to close its borders in April due to a spike of COVID-19 cases.
- Nissan will begin using cobalt-free electric vehicle batteries by the mid-2020s as prices for the metal soar.
- Logistics conditions remain strained, with trucking demand exceeding availability and continued congestion at ports due in part to operating challenges related to the pandemic. Clients are advised to provide expanded lead times on orders to help ensure delivery dates.
Markets
- The seven-day average of new COVID-19 cases in the U.S. is now trending higher than the 14-day average, a historical sign that case counts are on the rise.
- There were 79,264 new COVID-19 cases and 612 deaths in the U.S. yesterday. Over 167 million vaccine doses have been administered, with 17.8% of the population fully vaccinated.
- Roughly 75% of U.S. adults aged 65 and older have received at least one COVID-19 vaccine, with more than half fully vaccinated.
- New mutations of COVID-19 are popping up in increasingly complicated patterns, concerning health officials around the world over the long-term effectiveness of existing vaccines.
- Michigan reported nearly 8,500 COVID-19 cases on Saturday, the highest since December.
- New Jersey, the state with the highest U.S. death rate from the virus, will open vaccines to all residents 16 and older on April 19.
- New York City set a record for the most COVID-19 vaccines given out in one day at over 100,000 doses, as nearly 34% of its population is now immunized.
- The White House plans to update its target to make all American adults eligible to receive a COVID-19 vaccine to April 19, up two weeks from the previous May 1 deadline.
- The CDC issued new guidance downplaying the risks of surface transmission of COVID-19, saying routine disinfection is overkill and the risk of surface infection is 1 in 10,000.
- The White House is working with AstraZeneca to find new manufacturing capacity in the U.S. after the company agreed to abandon a Baltimore facility due to quality-control issues that botched 15 million doses.
- More than 40,000 children in the U.S. have lost at least one parent to COVID-19.
- Of 916,000 job gains last month, the leisure and hospitality sector took the highest share, recording 280,000 new hires, followed by government, construction and professional services. IT jobs grew by 50,000 on increased business investment in cloud technology and remote work software.
- Small businesses reported record-high percentages of unfilled jobs in March — 42% compared to an average of about 22% since 1974 — as economic conditions brighten despite high unemployment.
- Activity in the U.S. services industry surged to a record high in March amid robust growth in new orders, with an index charting non-manufacturing activity rising to 63.7 over the previous month’s 55.3.
- New orders for U.S.-made goods fell 0.8% in February after surging 2.7% the previous month, likely a result of unusually cold weather.
- More than 3.1 million Americans over the age of 55 plan to apply for Social Security benefits earlier than they once thought due to the pandemic, a trend expected to boost employment for younger Americans.
- U.S. consumer bankruptcies surged 41% month over month in March, their highest level in a year as a backlog in filings is cleared.
- Investment bank UBS predicts roughly 1 in every 11 stores in the U.S. will close in the next five years, with office-supply, sporting-goods and clothing retailers taking the brunt of the loss from a continued shift to e-commerce.
- The number of subprime borrowers falling behind on auto loans has increased month over month for six consecutive months, a negative sign in a period of otherwise low consumer delinquencies.
- The Consumer Financial Protection Bureau is pressing lawmakers to restrict foreclosures for the rest of this year, as the agency predicts a historically high volume of borrowers exiting forbearance as the economy recovers.
- A Norwegian cruise line is pressing the U.S. government to allow cruises from July 4, arguing a vaccination requirement for passengers and crew members is sufficient caution against COVID-19.
- Southwest Airlines recalled 209 pilots from an extended leave program to support its rebounding summer schedule, a positive sign for airlines.
- The White House’s ambitious plan for installing 500,000 new electric vehicle charging stations across the country faces a myriad of legal, technical and budgetary problems despite being a key proposal in the recently unveiled $2.3 trillion infrastructure bill.
- Volkswagen announced plans to begin mass-producing electric vehicles with bi-directional charging in 2022, providing the vehicles with the capability to send power back into the electric grid, to a home or another electric vehicle.
- Cadillac unveiled its prototype for its Lyriq SUV, the company’s first electric vehicle, with plans to launch in 2022.
International
- India added more than 100,000 new COVID-19 cases over the past 24 hours, becoming only the second nation to pass the 100,000 single-day milestone behind the U.S. as cases surge 12-fold from early February. The country has surpassed Brazil as the world’s current virus epicenter.
- The number of coronavirus patients in French ICU beds is expected to increase for the next two weeks before peaking, health officials predict.
- German lawmakers are again calling for tighter lockdown measures as COVID-19 infections rise despite months of restrictions.
- Britain took significant steps toward fully reopening its economy yesterday, allowing non-essential shops to reopen and reducing restrictions on restaurants and pubs, though a ban on foreign travel could remain for longer.
- Hungary will being a gradual easing of pandemic restrictions within days as roughly 25% of its population of 10 million has been vaccinated.
- Greece allowed shops to reopen Monday with restrictions despite rising COVID-19 case counts, a response to growing public fatigue over months-long lockdowns.
- Chile is experiencing record highs in both daily infections and hospitalizations for COVID-19.
- Colombia joined Pakistan and India in allowing the private purchase and import of COVID-19 vaccinations, a potential boost to the nation’s nascent inoculation campaign.
- Venezuelan authorities extended lockdown measures amid low vaccine supplies and surging COVID-19 case counts.
- Japanese health officials fear variants of COVID-19 are behind a recent fourth wave in infections, with just 109 days remaining until the Tokyo Olympics as some regions reintroduce curbs on nighttime activity.
- North Korea became the first country to bow out of the summer Olympics, citing pandemic fears.
- A variant of COVID-19 detected in a Tanzanian citizen had more than 40 mutations of the virus, while a small outbreak in South Africa threatens to disrupt months of low case counts in the nation.
- Draconian public health measures throughout most of Africa have helped hold total COVID-19 case counts on the continent to less than 4.1 million and deaths below 110,000.
- Singapore will begin accepting COVID-19 “travel pass” data, including a person’s vaccination status, for passengers traveling to the island state.
- More than half of Israel’s 9.3 million people have received both doses of COVID-19 vaccines, marking the most successful inoculation campaign in the world.
- New Zealand is set to open one of the world’s few quarantine-free “travel bubbles” with Australia later this week.
- A proposed increase in International Monetary Fund reserves could provide the $44 billion needed to vaccinate 70% of the population of low- and middle-income countries.
- While business conditions show Mexico’s manufacturing sector to be shrinking, the contraction slowed to its lowest pace in a year in March. Separately, remittances sent to Mexico — a major source of the country’s support for low-income families — saw their biggest-ever increase in February, totaling $3.2 billion.
- The U.S., China and other G-20 countries are expected to extend a freeze in bilateral debt service payments through the end of this year, freeing money that countries could use to combat the pandemic.
- Annual inflation in Turkey climbed above 16% in March for the first time since mid-2019, capping a six-month rise as pressure mounts for the central bank to tighten policies.
- Activity in China’s services sector rebounded in March amid solid hiring and business optimism, with an index of activity rising to 54.3, the highest since December.
- Japanese household spending dropped 6.6% in February from a year earlier, a larger-than-expected decline amid weak consumption caused by pandemic lockdowns. At the same time, the nation’s real wages rose for the first time in a year in February, largely due to weakening prices.
- China became the first major world economy to create its own digital currency, which is expected to give the government vast new tools to monitor both its economy and its people.
- The pandemic has rewritten the rules of “odd job” work in many low-income countries, denying many people the option to simply hustle harder for quick cash during times of economic distress.
- Japan Airlines announced plans to retire its fleet of 13 Boeing 777 planes with Pratt & Whitney engines, citing fears over February’s incident where an engine on a United Airlines plane shed debris.
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.