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Supply
- Oil prices rose more than 4% last week on further signs that the COVID-19 Omicron variant might affect demand less than initially thought. Energy futures were higher in mid-morning trading, with WTI up 2.3% at $75.48/bbl and Brent up 3.0% at $78.39/bbl. U.S. natural gas was 6.7% higher at $3.98/MMBtu.
- 2022 crude oil consumption is expected to reach 99.53 million bpd, just shy of pre-pandemic levels, while U.S. price forecasts vary widely from as low as $35/bbl to as high as $140/bbl.
- Europe’s Balkan region turned to rolling blackouts last week to help contain exorbitantly high energy prices.
- Roughly 1 in 5 Americans surveyed said high energy prices have prevented them from paying at least one monthly bill in full the past year.
- Belgium’s government plans to close the nation’s seven remaining nuclear reactors by 2025, officials said, as bidding continues to build a large gas-fired plant just north of Brussels.
- Indian lawmakers are reviewing a proposal that would stop new coal-fired construction under a plan to meet the nation’s long-term climate pledges.
- Our most recent list of force majeure and allocation announcements from suppliers is here.
Supply Chain
- “Exceptional drought” conditions were lifted for over 15% of California the past month, boosted by an early winter storm that brought snow and rain to much of the state.
- U.S. rail carloads were up 1.7% annually the week ended Dec. 18 while intermodal volumes were down 6.9%, still affected by lower auto movements caused by the global chip shortage.
- November truck tonnage on U.S. roads rose 4.3% to the highest level since April.
- UPS will add a 30-cent surcharge to all domestic ground residential deliveries beginning Jan. 16, just three weeks after the company’s 2022 rate increases take effect and one day after fees on peak-season deliveries fall away.
- Despite the number of Southern California logistics workers surging 24% during the pandemic, vacancies have outpaced hiring, with job openings nearly tripling during the same period.
- The U.S. administration announced $230 million in grants to create three “pop-up” container yards and invest in dozens of other projects in 19 states to expand ports and increase cargo throughput.
- Supply chain disruption over the coming months will likely depend on how many people get vaccinated against COVID-19, the U.S. administration said.
- Rapid spread of the COVID-19 Omicron variant has disrupted shipping crew changes and travel schedules, keeping tens of thousands of seafarers stuck on the water beyond their contracts.
- Aluminum prices rose 6% to a two-month high last Thursday on concerns of smelter shutdowns caused by rising energy prices. Prices for the metal are up more than 40% this year.
- Automakers Nikola and Volvo announced new orders for dozens of heavy electric trucks last week, adding momentum to the industry’s transition to renewables.
- U.S. auto sales are forecast to drop 17.5% in December from a year ago due to continued supply disruption. Car production in the U.K. fell 28.7% in November for the slowest month in 37 years.
- The global shortage of semiconductors is potentially the most acute in older analog chips, which form the backbone of simple operations within larger, more complex electronics.
- Foxconn, maker of semiconductors for many electronics companies including Apple, is delaying reopening a plant in southern India after production was suspended due to employee protests over a food poisoning outbreak at a company hostel.
- Mediterranean Shipping Co. is set to acquire regional Brazilian operator Log-In Logistica, adding up to nine vessels to its fleet.
- A Russian maker of superfast LNG- and hydrogen-powered electric vehicle charging stations plans to expand into London next year.
- Chinese officials said they would extend tariff exemptions on some U.S. imports until next June, although details have yet to be announced.
Domestic Markets
- The U.S. reported 181,948 new COVID-19 infections and 76 virus fatalities Sunday. The seven-day case average stands at 214,499, the highest since January and up 80% in the past two weeks, including unusually large numbers of infections among children.
- More than 71,000 Americans were hospitalized with COVID-19 over the holiday weekend, gaining on the previous Delta wave’s record 100,000 patients.
- New York recorded 49,708 new COVID-19 infections on Christmas Eve, a record.
- Florida reported 32,850 COVID-19 infections on Christmas Day, its second record in as many days, as residents lined up for hours outside testing sites.
- New COVID-19 cases in California have more than doubled from a week ago.
- Record numbers of COVID-19 hospitalizations were reported in Maine, Vermont and New Hampshire last week.
- Maryland hospitals declared disaster status and began rationing care on Friday.
- Ohio set multiple records for new daily COVID-19 infections last week.
- New Jersey reported 9,711 new COVID-19 cases Wednesday, a record.
- Virginia is reporting its highest COVID-19 case counts since January.
- COVID-19 fatalities in Texas rose 35% year over year in 2021.
- More than 11% of Indiana’s nursing home workforce has left the industry since the start of the pandemic, forcing many facilities to limit admissions.
- Yale University will delay the start of spring semester and move the first several weeks online over rising cases of the COVID-19 Omicron variant.
- The Miami Hurricanes withdrew from the Sun Bowl after a rash of COVID-19 infections shut down the football program, as other bowl games have been canceled.
- Universal Orlando Resort has reimposed a mask mandate.
- The U.S. Supreme Court will hold a special session after New Year’s to hear arguments over the White House’s COVID-19 vaccine mandate for large companies and healthcare workers.
- The FDA cleared Merck’s at-home COVID-19 antiviral pill, the second such treatment approved in recent weeks.
- The antiviral drug remdesivir can reduce the risk of hospitalization and death from COVID-19 by 87%, new research shows.
- U.S. airlines canceled nearly 2,400 flights over the holiday weekend, traditionally one of the busiest travel periods of the year, due to staff shortages caused by COVID-19 Omicron infections. Just 1.7 million people passed through airport security Friday compared to 2.6 million on Christmas Eve 2019.
- The U.S. added eight new countries to its highest-risk category for COVID-19, including top destination Spain, while removing another eight south African countries from its restricted list.
- U.S. officials have not yet indicated that a fourth COVID-19 vaccine dose may be needed for some people.
- Health experts are discouraging the use of cloth face masks as Omicron spreads, instead recommending the more protective surgical or N95 masks.
- The U.S. is monitoring more than 60 cruise ships reporting COVID-19 outbreaks on board. A Carnival cruise ship from Florida was denied entry to two ports in the Caribbean islands after several COVID-19 cases were reported.
- Most companies that had scheduled a return to offices in the New Year have delayed their plans due to the rapid rise in Omicron cases.
- U.S. holiday sales since Nov. 1 rose a surprise 8.5% from last year, the fastest pace in 17 years, according to Mastercard.
- High U.S. inflation is eating into wage gains made by salaried and non-salaried employees during the pandemic, new data shows.
- Economists expect continued strong growth in M&A activity and share buyback programs next year, as cash-laden firms reap the benefits of low interest rates and shifting industry trends.
- The S&P 500 reached a fresh record 68 times the past year, second only to the index’s gains from 1995.
- Sales, prices and new construction of commercial real estate set fresh records in 2021.
- Almost half of states have passed eviction-related legislation in 2021 after the federal government’s nationwide moratorium expired earlier this year.
- Rental car companies are struggling to rebuild inventories after selling off much of their fleets at the start of the pandemic, pushing the average daily rental rate in the U.S. to $81 per day in December, up 31% from a year ago.
- Automakers focused on sustainability are using recycled ocean plastic to manufacture airbags and recycled PET to make vehicle seat parts.
International Markets
- The U.K., France and Italy smashed previous records for single-day COVID-19 cases late last week. Holiday celebrations across Europe have been canceled alongside new pandemic restrictions.
- In its latest surge, the U.K. has seen record COVID-19 infections among children aged 5 to 11. Officials have discussed giving out fourth vaccine doses to some members of the population.
- COVID-19 cases in Ireland are at record highs.
- South Korea reported 109 COVID-19 deaths Thursday, an all-time high amid record critically ill patients.
- COVID-19 cases hit new records in Australia and New Zealand over the holiday weekend, prompting Australia’s New South Wales and Victoria states to reimpose indoor mask mandates.
- Germany reported its first fatality tied to the COVID-19 Omicron variant last week, while new restrictions are set to take effect regardless of vaccination status. Neighboring Austria has approved fourth vaccine doses for some of its population.
- China reported 158 new COVID-19 cases Sunday, the most since January.
- Latin America edged past Europe to become the most vaccinated region in the world, a strong rebound from the country’s high levels of COVID-19 cases and fatalities early in the pandemic.
- Africa’s COVID-19 vaccine drives are sputtering due to a lack of infrastructure to store and refrigerate imported shots.
- Democratic Republic of Congo, the least vaccinated nation in the world, has seen a rapid spike in COVID-19 cases as it enters a fourth virus wave.
- German airline Lufthansa is cutting 10% of its planned flights this winter over rising cases of the COVID-19 Omicron variant and increased travel restrictions. Globally, roughly 5,700 flights were canceled on Dec. 25.
- Nearly 100 million people have been driven into poverty by the pandemic, making less than $2/day, according to the World Bank.
- The world economy will exceed $100 trillion for the first time next year, while China’s near-term growth rate has slowed, new projections show.
- Japan’s 0.5% consumer inflation in November marked the biggest yearly rise in two years, largely a result of surging fuel costs.
- The Mexican economy shrank a surprise 0.2% in October, the third month-over-month contraction in a row.
- Canada’s economy grew 0.8% in October, the fifth consecutive month of gains, while officials said it is too early to gauge the effects of a shutdown in British Columbia trade activity after historic rain and flooding last month.
- Germany’s giant current account surplus, for years the largest in the world, is shrinking due to wage increases, higher energy costs and massive pandemic-related government spending. Outlooks remain upbeat for most of the nation’s small and mid-size firms, surveys show.
At M. Holland
- M. Holland will be closed Friday, Dec. 31 for the New Year’s holiday. We wish all a safe and happy new year!
- 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.