COVID-19 Bulletin: February 22

February 22, 2021 • Posted in COVID-19

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Winter Storm Uri

  • The battered Texas electricity grid was back up and running on Friday, as the White House made a Major Disaster declaration that will provide federal funds for temporary housing, home repairs, low-cost loans and other aid.
  • Hundreds of thousands of people, however, still faced the challenges of reconnecting to electricity supplies and navigating ice-blanketed roads.
  • Many people who kept even small amounts of power on over the several-day storm are reporting energy bills in the thousands of dollars, even tens of thousands of dollars.
  • The monetary toll of the storm could exceed that of even major hurricanes, with some estimates expecting an $18 billion hit
  • Water problems in Texas have not abated, as residents deal with burst pipes and bacteria-infected water. People also struggled to find necessities as many restaurants and grocery stores were forced to throw out food or close entirely.
  • Winter Storm Uri delayed the shipments of about 6 million doses of COVID-19 vaccines in the U.S., causing UPS, FedEx and Moderna to work through Sunday to package and transport backlogged orders. Many people are now behind on their second scheduled doses of the shots. 
  • Texas will likely report a surge of new COVID-19 infections over the next week as testing sites closed by the storm catch up on a backlog of new cases. The state also administered hundreds of thousands of fewer vaccines during the cold snap.
  • Texas power plants were unprepared for Winter Storm Uri. They are designed to shed heat instead of keeping it in, a useful tool during hot summer months that can falter in an instant during unusually cold weather. Texas’s power grid operator is being hit with multiple lawsuits over weatherization failures.
  • Mexico’s president urged citizens to reduce their power consumption amid shortages of imports from Texas. More than 20 fatalities in Mexico were blamed on the storm.
  • Several refineries in the state could take weeks to renew full production as they repair damages from the “big Texas freeze.”
  • The storm has caused unprecedented disruption to North American petrochemicals production:
    • BASF declared force majeure on nylon products and intermediates made at its Freeport, Texas, plant and on Ultraform® POM Q600 grades.
    • Braskem declared force majeure on polypropylene products.
    • Celanese declared force majeure on a broad list of products.
    • Chevron Phillips declared force majeure on polyethylene products.
    • Covestro announced a new force majeure effective Feb. 14 on all polycarbonate products, superseding a prior force majeure that was in place.
    • DuPont declared a global force majeure for Zytel® (including Zytel® HTN and Zytel® Specialty Nylons), Crastin®, Rynite®, Selar®, Minlon® and Pipelon®.
    • Flint Hills declared force majeure on polypropylene products due to the storm.
    • ExxonMobil said it is allocating polypropylene products. 
    • Formosa expanded and extended its force majeure declaration to all Formolene® polyolefin products.
    • Ineos declared force majeure on polypropylene products due to the storm.
    • Ineos Styrolution declared force majeure on Luran® S ASA, Terluran® ABS and Novodur® high heat ABS.
    • Invista declared force majeure on U.S. supply of PA66 intermediate chemicals.
    • LyondellBasell declared force majeure on polyethylene and polypropylene products due to the storm.
    • LyondellBasell announced a partial lifting of force majeure, affecting Line 5 at its Morris, Illinois, facility and LD1, LD2 and PF4 at its Clinton, Iowa, facility.
    • Occidental, the second largest producer in the Permian Basin, declared force majeure on oil deliveries. 
    • OxyChem declared force majeure on U.S.-based PVC products. 
    • Sabic declared force majeure on LEXAN™ resins, CYCOLOY™ resins, XENOY™ resins, GELOY™ XP series resins, VALOX™ FR resins and XYLEX™ resins, as well as ABS product from its Tampico, Mexico, plant.
    • Total declared force majeure on polypropylene products made at its La Porte, Texas, facility.
    • Vestolit declared force majeure on suspension, copolymer and emulsion PVC resins produced in Colombia and Mexico due to feedstock disruptions from the Gulf Coast.

Supply

  • Oil prices fell slightly below $60 per barrel at the end of last week, a dip from mid-week highs but still at a level not seen since January of last year.
  • Crude prices were higher in early trading today, with the WTI up 0.8% at $59.69/bbl and Brent up 0.9% at $63.46/bbl. Natural gas was down 3.8% at $2.95/MMBtu.
  • The U.S. oil rig count ended its 12-week streak of gains, slipping by 1 last week to a total of 397 — still nearly 400 fewer than pre-pandemic levels
  • Brazil’s president ousted the head of state-run oil company Petrobras after weeks of clashes over fuel price hikes.
  • Italian energy company Eni became the latest energy group to pledge carbon neutrality by 2050.

Supply Chain

  • Freight operators and transportation groups are lobbying for faster driver access to COVID-19 vaccinations, as the logistics industry has been one of the most critical operations in keeping the economy moving during soaring e-commerce activity.
  • We expect continuing logistics disruption in the U.S. from severe winter conditions that blanketed much of the country last week.
  • 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

Driven by Mortgages, Household Debt Hits New High
  • U.S. business debt is nearing historical highs, with bankruptcy risks at small- and medium-sized firms remaining “considerable,” the Federal Reserve says, while commercial real estate is likely to take even more hits once the pandemic subsides.
  • A U.S. House committee unveiled a $1.9 trillion COVID-19 aid bill that is expected to pass by late next week.
  • JPMorgan expects the U.S. economic recovery to outpace that of China.
  • U.S. services companies reported increased activity during February on higher consumer demand, while service-sector firms in Europe and Japan saw declines. 
  • U.S. factory activity slowed in early February, an effect of the global semiconductor chip shortage and higher input prices.
  • The Midwest saw the country’s best economic recovery in 2020, with cities such as Columbus, Indianapolis, Minneapolis and Cincinnati notching the lowest unemployment rates of 51 major metro areas. Meanwhile, blue-collar jobs in construction, package delivery and warehousing are some of the only jobs to exceed pre-pandemic levels.
  • The FAA is using satellites to track all Boeing 737 MAX jet flights around the world, a precaution as the plane resumes flight after a 20-month grounding.
  • A Pratt & Whitney engine on a Boeing 777 wide-body jet failed shortly after taking off from Denver, dropping large chunks of debris on local parks and neighborhoods. Boeing recommended that airlines ground 777 aircraft with Pratt & Whitney engines, while airlines in Korea, Japan and the U.S. grounded dozens of 777 jets.
  • In the Netherlands, officials are investigating a Boeing 747 cargo plane with Pratt & Whitney engines that dropped engine parts after takeoff from Maastricht airport on Saturday.
  • MGM will resume 24/7 operations at three of its Las Vegas resorts on March 3.
  • The U.S. officially rejoined the Paris climate accord last week as the White House pursues a major policy shift toward cleaner energy.
  • Winter Storm Uri is expected to boost sales of rooftop solar systems.

International

Our Operations

  • Last week’s Plastics Reflections webinar on 2021 Drivers and Trends for the North American Plastics Market can be viewed here.
  • Our 3D Printing business unit has launched a new e-commerce site. Access the new site here.
  • 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.

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