COVID-19 Bulletin: March 22

Hello,

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Supply

• Crude prices ended down more than 6% last week on waning expectations for the European recovery as new COVID-19 lockdowns are imposed. Oil futures were down in mid-day trading today, with the WTI off 0.4% at $61.20/bbl and Brent down 0.5% at $64.24/bbl. Natural gas was 0.6% higher at $1.96/MMBtu.
• The number of active oil and gas rigs in the U.S. increased by nine last week to 411, still 361 below the year-ago level. 
• Nuclear energy overtook coal-fired electricity generation in the U.S. for the first time ever in 2020, a milestone.
• China installed 52 gigawatts of wind power in 2020, breaking the world record for the most wind capacity installed in a single year by any country.
• In successful experiments, scientists from the Department of Energy and Clemson University have successfully recycled polystyrene back to monomers using “mechanochemistry,” using a ball mill to crush plastic at ambient temperatures until a chemical reaction occurs. 
• Our most recent list of force majeure and allocation announcements from suppliers is here.

Supply Chain

• The global computer chip shortage is worsening, impacting a broad swath of industries, and driving up prices for a variety of products. 
• Japan’s Renesas Electronics, a leading supplier of computer chips to the automotive industry, suffered a fire on Friday that will curtail production for a month. 
• On Saturday, Stellantis said it will begin building Ram trucks without computer chips at plants in Michigan and Mexico for later final assembly, while Ford said it will idle an Ohio facility this week and curtail production at a plant in Kentucky. 
• In addition to computer chips, shortages of seat foam, polypropylene and shipping containers are causing automotive production disruptions as improving consumer confidence increases demand for new cars.
• Canadian Pacific will acquire Kansas City Southern in a $25 billion transaction to create the first freight-rail network linking Mexico, the U.S. and Canada. 
• Global air cargo rates were up 84% in February compared to the year-ago period, although there were wide regional differences. 
• FedEx Express shipping rates could remain significantly elevated for the next 12 months due to lower belly capacity from the reduced number of passenger flights, which is squeezing airfreight supply. 
• Fears of a new strike at Canada’s second-largest port are mounting after unionized dockworkers unanimously rejected an offer from management. 
• Profits at German carrier Hapag-Lloyd nearly tripled in 2020 as even higher freight rates are expected to give the company billion-dollar profits this quarter and next. 
• The International Chamber of Shipping warns that unvaccinated sailors could cause problems for global supply chains, with more countries instating COVID-19 vaccine requirements at their borders and denying entry to those who have not been inoculated. 
• Commodities producers are avoiding shipping that requires expensive crew changes, prolonging the plight of over 200,000 seafarers who have been stranded on ships for the past year because of industry turmoil and border restrictions. 
• The U.S. Postal Service continues to struggle to deliver on time, with an on-time performance for first-class mail of just 84% entering March, well short of its 96% goal.  
• Unionized trucking companies will likely see a boost from the recent $1.9 trillion economic stimulus package, which provides funding for ailing multiemployer pension plans. 
• Hormel Foods Corporation absorbed $80-100 million in supply chain disruption costs in 2020. 
• Wabtec Corp. has created a fully battery-powered locomotive that will be used on the 350-mile route in California’s San Joaquin Valley. 
• Water scarcity on the U.S. West Coast is upping the risks of wildfires, with drought conditions encompassing 75% of the land across 11 Western states.
• A shortage of corrugated material is requiring some suppliers to ship in boxes that may not be stackable. Such unstackable packaging should be clearly marked. In the interest of safety, we urge clients and our fulfillment partners to notify anyone involved in logistics operations to be mindful of the shortage and careful to heed warning labels that may appear on resin containers.
• 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

• There were 33,645 COVID-19 cases and 432 deaths in the U.S. yesterday. Over 124 million vaccine doses have been administered, with 12.8% of the population fully vaccinated.  
• Federal officials warned that the U.S. may be on track for another surge in COVID-19 cases following the pattern of peaks and valleys seen throughout the pandemic.
• Michigan, one of more than a dozen states experiencing increasing COVID-19 infection rates, experienced a 53% increase in cases last week. 
• Miami Beach, Florida, declared a state of emergency to reduce superspreading events among spring break crowds. 
• New York state has reported its first case of the virulent COVID-19 mutation dominant in Brazil, where infections are at their highest ever. 
• Massachusetts is easing statewide restrictions after a drop in average daily COVID-19 cases and hospitalizations.
• Los Angeles movie theaters reopened at limited capacity for the first weekend in a year. 
• The CDC shortened social distancing guidelines for kids in school from 6 feet to 3 feet. 
• The U.S. monthly output for the three authorized COVID-19 vaccines is expected to reach 132 million doses for March, nearly triple the 48 million in February as manufacturers ramp up production. 
• AstraZeneca will seek emergency FDA authorization of its COVID-19 vaccine after a U.S. trial found it was 79% effective with no serious side effects. 
• Best Buy is providing COVID-19 home tests for employees who must work in stores. 
• California-based Bolthouse Farms is offering $500 bonus payments to employees who get a COVID-19 vaccine. 
• Moderna is partnering with IBM on a vaccine supply chain and data sharing strategy, a step in speeding up vaccinations and making appointments more widely available. 
• A coalition of tech giants and healthcare providers — including Microsoft, Oracle and Salesforce — is teaming up to provide a digital vaccine certificate that people can use to gain access to certain locations and services.
• U.S. utility companies have shut off natural gas and electricity service to more than 750,000 households across 10 states during the pandemic. 
• Sales of existing homes fell 6.6% in February to a six-month low on scarce inventories.  
• There are now more real estate agents than homes for sale in the U.S., a sign of the red-hot market that is persuading tens of thousands more Americans to try their hands at selling property.
• Rising searches for airfares and activity on booking sites indicate an increasing interest among consumers to travel again. 
• Volkswagen announced it has no plans to develop new combustible engines following a shift in the company’s focus to electric vehicles. 
• Jeep has unveiled a new all-electric version of its Wrangler SUV as a concept vehicle, hoping to gauge customer interest in the future direction of its product line. 

International

• Brazil’s ICU units, inundated by the world’s most severe COVID-19 resurgence, are at over 80% of capacity, with hospitals facing the prospect of removing severely ill patients from ventilators due to a shortage of drugs necessary for intubation. 
• French officials imposed a third strict lockdown on several regions, including Paris, as criticisms mount over the nation’s slow immunization campaign.
• Germany’s prime minister is proposing another four weeks of lockdown restrictions after COVID-19 cases rose beyond the level threatening a healthcare overload.
• Italian parents and children are protesting school closures after another round of lockdowns went into effect last week. 
• India is in the early stages of a COVID-19 resurgence with 30,535 new cases in one state expected to send the country’s overall cases to a multi-month high, threatening to derail the nation’s robust economic recovery. 
• COVID-19 cases have been rising in provinces across Turkey, where the death toll surpassed 30,000 on Sunday.
• Foreign spectators will be barred from attending the Summer Olympics in Tokyo, event organizers said.
• The European Union could begin withholding AstraZeneca COVID-19 shots from the U.K. until the drugmaker fulfills its delivery obligations to the bloc. 
• South Africa sold a million doses of its AstraZeneca vaccine supply to the African Union after determining the shots are not effective against the country’s predominant virus strain. 
• Nordic countries including Norway, Sweden and Denmark are maintaining temporary bans on AstraZeneca’s COVID-19 vaccine despite the shot’s renewed use in neighboring countries. 
• Scientists have identified the mechanism that may cause blood clots in people who received AstraZeneca’s COVID-19 vaccine.
• European trust in AstraZeneca’s vaccine has plunged in recent weeks. 
• A small number of recipients of China’s Sinopharm COVID-19 vaccine in the U.A.E. are being asked to get a third injection after antibody tests found a low immune response from two doses.
• Israel is considering employing a newly developed electronic bracelet that can monitor whether arriving travelers are adhering to quarantining regulations. 
• The U.K. has developed a COVID-19 rapid test that quickly identifies virulent strains of the virus to contain them. 
• A record 844,285 vaccine doses were administered in the U.K. on Saturday, while the country recorded only 33 new virus deaths, the lowest daily number since October. 
• The European Union is far behind the U.K. and U.S. in rolling out vaccines:

• With less than 4% of the country vaccinated, Mexico’s health minister is warning of a possible third wave of COVID-19.
• Taiwan began inoculating citizens today. 
• Taiwan’s exports surged 48.5% in February on strong demand for electronic goods.
• British Airways is mulling selling its headquarters due to a permanent shift to homeworking.

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.
• M. Holland is proud to be named among the Plastics News Best Places to Work again this year. We also were recently named among the Best Places to Work by Crain’s Chicago Business.
• 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.