COVID-19 Bulletin: December 20

December 20, 2021 • Posted in COVID-19

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Supply

  • Oil prices fell roughly 2% Friday to end the week with a loss. Crude futures sank further in late morning trading on Omicron fears, with WTI down 5.6% at $66.91/bbl and Brent down 4.7% at $70.09/bbl. U.S. natural gas was 4.8% higher at $3.87/MMBtu.
  • The U.S. active oil rig count rose by three to 579 last week, the most since April 2020.
  • Goldman Sachs expects global oil consumption to hit record highs in 2022 and 2023
  • LNG prices in Asia soared last week, rising 21% from the week prior to an average of $43.35/MMBtu. 
  • Polish utilities are raising rates by as much as 24% next year due to high wholesale energy prices and the cost of purchasing CO2 emission rights.
  • Global coal-fired power demand will likely reach an all-time high this year and next due to surging demand in China, the world’s largest consumer of the fuel, as well as India and the U.S. 
  • Russian officials believe the Nord Stream 2 gas pipeline to Germany could be operational by next month, much quicker than German regulators have signaled, due to the energy shortage keeping prices high in Europe. 
  • A French utility closed two nuclear power plants after cracks were discovered in their infrastructure, taking a full terawatt-hour of output offline when the nation’s power contracts are already at record highs.
  • Italian lawmakers have approved more than 4 billion euros in energy subsidies for households and businesses next year. 
  • TotalEnergies and Shell were among the companies bidding for two exploration blocks in Brazil’s prolific pre-salt zone, marking one of the first big spending decisions after producers widely reported losses during the first year of the pandemic. 
  • Norway will invest $111 million in three new emissions-free hydrogen and ammonia projects as it works to transition to a low-carbon economy. 
  • Higher component and equipment costs have partially undone the years-long downswing in the price of building new renewable energy projects.

Supply Chain

  • For the first time ever, the Chicago Mercantile Exchange will offer public trading on container freight futures for six global routes starting in February 2022. Along with bringing more visibility to the industry, the move could allow logistics operators to better protect against the sort of price volatility made commonplace by the pandemic. 
  • Early indications suggest logistics providers are seeking big boosts in prices for 2022 contracts, as high shipping demand continues to outweigh tight capacity across the freight sector.
  • Tight airfreight capacity is hampering efforts by U.S. importers to expedite goods around ocean congestion. 
  • Supply chain disruptions are denting holiday sales for many U.S. businesses, while the cost of seasonal returns has risen as much as 7% since last year. 
  • Overall U.S. wholesale distribution revenues are set to grow 21% this year to more than $7 trillion, the latest data shows. 
  • FedEx incurred $470 million in added expenses for the quarter ending Nov. 30, with higher labor and operating costs offsetting revenue gains from elevated shipping rates. 
  • An upgrade at western Mexico’s Manzanillo port, the nation’s busiest, will expand its annual capacity by 300,000 TEUs to 1.7 million, with construction slated to begin in the second half of 2022. 
  • Lumber prices are on the rise again, up nearly double from mid-November in anticipation of the spring building season. 
  • Aluminum prices rose to a six-week high last week on lower Chinese production in November, a result of the nation’s efforts to restrict electricity consumption in power-intensive industries. 
  • The Port of Long Beach will roll out prototype technology in February to provide free cargo tracking data for supply chains. 
  • Maryland is starting a collaborative program aimed at helping manufacturers in the state manage supply chain disruptions
  • Consolidation among semiconductor manufacturers is raising pressure on the industry’s suppliers. 
  • RV maker Thor Industries has inked deals with alternative suppliers in North America and Europe to help clear an $18 billion backlog of orders spurred by ongoing component shortages.  
  • Self-driving technology startup Aurora has launched a pilot program with Uber’s freight unit to deliver goods in Texas. 
  • BP and Maersk completed their first trials of tanker sailings powered by marine biofuel, a potential future source of lower shipping emissions. 

Domestic Markets

Fed Expects Rate Hikes for 2022 and Beyond
  • Wages and stable hours are sharply rising for day laborers, long the most tenuously employed people in the U.S. 
  • Buy now, pay later” plans are booming in the U.S., posing difficulties for accurate consumer credit reporting. 
  • Boeing made 34 aircraft deliveries in November, bringing its year-to-date total to 302 compared to 118 the same time last year. Tightened inspections are expected to sideline deliveries of the company’s advanced carbon-composite 787 Dreamliner jet until April 2022, which has reduced summer schedules for at least one U.S. airline. 
  • Amazon plans to significantly expand its grocery delivery service in 2022. 
  • U.S. restaurant seating was down as much as 12% from pre-pandemic levels in recent weeks, with the industry becoming one of the first to suffer fallout from the COVID-19 Omicron variant. 
  • The latest Spider-Man installment opened to a record-setting $253 million in box office earnings this weekend, puncturing expectations of the theater industry’s continued pandemic-induced decline. 

International Markets

At M. Holland

  • M. Holland will be closed Friday, Dec. 24, for the Christmas holiday. We will be closed Friday, Dec. 31, for New Year’s Eve.
  • 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.

For all COVID-19 updates and notices, please refer to the M. Holland website.

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