COVID-19 Bulletin: February 5

February 5, 2021 • Posted in COVID-19

Good Afternoon,

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Supply

  • Energy prices were higher in mid-day trading today, with WTI up 1.7% at $57.18/bbl, Brent up 1.5% at $59.71/bbl, and natural gas up 3.8% at $3.05/MMBtu.
  • Cash-strapped refiners are skimping on routine spring maintenance, which could curtail production if demand spikes in the summer as expected.
  • Saudi Arabia, the world’s top oil exporter, raised prices on all crude oil exports to the U.S. and Europe for March while leaving unchanged the official selling prices of crude to the Asia market.
  • Alberta, Canada, which spent $1.5 billion to help jump start construction of the Keystone XL pipeline, is considering making the U.S. pay for the province’s expenses after the White House shut the project down last month.
  • South Korea’s government unveiled plans to build a $43.2 billion offshore wind farm by 2030, part of its efforts to meet emissions goals and drive economic recovery from the pandemic.
  • Denmark is constructing an artificial island in the North Sea to serve as a wind energy hub capable of supplying electricity to 10 million European households.
  • Whisky distilleries on an island west of mainland Scotland are turning to electricity produced by subsea tidal turbines, a development project of tidal energy firm Nova Innovation.
  • The Flexible Packaging Europe trade association issued a statement of concern about plastic resin shortages and price inflation in Europe.

Supply Chain

  • The Federal Maritime Commission is urging that ships arriving from Asia divert away from Southern California ports to less-congested Seattle and Tacoma.
  • Peloton is delaying the much anticipated launch of its connected treadmill and will spend $100 million on expedited air and ocean freight to address supply chain challenges that have caused weeks delays in deliveries of its exercise equipment.
  • French shipping giant CMA CGM is positioning itself in the air freight market with a bid to acquire two former Qatar Airways freighters for use as cargo aircraft. 
  • Global airfreight volumes fell 4.5% year over year in January alongside a dip in capacity of nearly 20%, indicating greater utilization of available space.
  • European road freight rates registered their first annual decline last year, a result of lower demand across the continent during the pandemic.
  • Europe’s Confederation of Paper Industries warned of shortages of corrugated packaging due to a coincidence of high demand and logistics challenges. 
  • Home Depot opened a new 1.5 million-square-foot fulfillment center in Dallas that features zero-emission, hydrogen-fuel-cell charging stations that will power its on-site material handling equipment.
  • Entering 2021, manufacturers are seeing substantial price increases and some shortages of supplies and materials, from aluminum to wooden pallets. Raw material prices will climb 2.9% in 2021, according to the Institute for Supply Management’s January manufacturing report.
  • Ford expects a 20% drop in Q1 vehicle output, including its best-selling and most profitable F-150 truck, resulting from semiconductor chip shortages.
  • German carmakers are rethinking just-in-time supply chains and stockpiling computer chips to avoid a repeat of the current chip shortage disrupting global automotive production.
  • Logistics conditions remain strained, with trucking demand exceeding availability, continuing congestion at ports, and backlogs at warehousing and packaging facilities due in part to operating challenges related to the pandemic. Shipping containers are in short supply, with demurrage charges rising. Clients are advised to provide expanded lead times on orders to help ensure delivery dates.

Markets

  • The pandemic outlook is improving dramatically in the U.S., with daily new cases down 30% and hospitalizations down 23% in just the past two weeks. Case counts are declining in 42 states and steady in the remaining eight, but still remain higher than spikes last spring and summer.
  • The U.S. is among the leaders in the vaccination race, on pace with Israel and the U.K. to inoculate 75% of its citizens this year.
  • There were 123,188 new COVID-19 infections yesterday and 5,084 reported fatalities.
  • While California’s COVID-19 statistics are improving, the virus is raging in its farming heartland with hospitals beyond capacity.
  • Wisconsin’s governor imposed a new mask mandate yesterday after the state legislature canceled the previous one.
  • A Harvard study suggests that a prior history of pneumonia is the second highest risk factor for COVID-19 victims behind age.
  • According to a CDC study, Hispanics reported symptoms of depression 59% more frequently than non-Hispanic whites during the pandemic.  
  • The rise of more COVID-19 variants is prompting growing questions about how best to mask
  • Johnson & Johnson applied for U.S. emergency-use authorization for its one-shot COVID-19 vaccine.
  • New COVID-19 variants are on the FDA’s radar. The agency said it plans to roll out processes to quickly evaluate booster shots tailored to new strains of the virus.
  • Those looking to get vaccinated against COVID-19 will be able to find more “mass-vaccination” sites opening up in their states.
  • Trials are underway to test whether mixing COVID-19 vaccines from different companies will lead to the same or better results.
  • The U.S. added 49,000 jobs in January, lowering the unemployment rate to 6.3%, but the labor force remains down nearly 10 million jobs from the pre-pandemic level.
  • The Senate advanced the White House’s $1.9 trillion rescue package yesterday, but killed a provision calling for a hike in the minimum wage to $15 an hour.
  • U.S. worker productivity, measured by hourly output per worker, fell at its fastest pace since 1981 in the fourth quarter as the pandemic continued to batter leisure and hospitality industries.
  • The pandemic’s hit to the restaurant industry, currently 4% of U.S. GDP, extends far beyond kitchen workers and waiters into the livelihoods of farmers, butchers, wineries and more.
  • Nearly 90% of small businesses surveyed by the Federal Reserve say business has not returned to pre-pandemic levels, with further government support likely crucial to their survival.
  • The White House’s initial plan to reopen K-8 schools in the first 100 days of the new administration is facing roadblocks due to new COVID-19 strains. Meanwhile, K-12 schools that seek to test students for the virus are confronting huge logistical challenges.
  • Ford posted its first net loss since 2008 in Q4 but a better-than-expected profit before one-time adjustments. Over the next five years the company plans to spend $22 billion, twice its previous projections, on electric vehicles and $7 billion on autonomous driving technology.
  • Kia will likely begin building its first Apple Inc. electric car at a factory in Georgia.
  • Retail brands including Tapestry Inc., Ralph Lauren, Kohl’s and Nordstrom are posting better-than-expected Q4 results, a result of lowering inventories and putting out fewer promotions.
  • Long-haul passenger flying may not resume to full force until 2023 or 2024.
  • Online bets on Super Bowl LV are expected to increase 63% this year, with 7.6 million mostly stay-at-home Americans participating in virtual gambling. The NFL capped attendance at the game to 25,000, a record low for football’s biggest event.

International

  • The Netherlands became the 21st nation to tally more than 1 million COVID-19 infections. 
  • The U.K. is imposing mandated quarantine rules for inbound passengers from coronavirus hotspots.
  • India, the world’s biggest vaccine manufacturer, is set to receive the largest number of COVID-19 vaccine doses — 97.2 million shots — in the first distribution from the World Health Organization’s Covax program for low-income countries.
  • Supply chain disruptions, regulatory delays and squabbling have hampered vaccine rollouts in the European Union, prompting some countries to look to vaccines from China and Russia as options.
  • German factory orders fell 1.9% in December, the first drop in eight months, as renewed pandemic restrictions took a toll. 
  • Indonesia last year experienced its first annual economic contraction since the 1988 Asian financial crisis, with GDP falling 2.2% in Q4 from a year earlier.
  • Canada is shutting down cruise ships through February 2022, effectively canceling another year of hugely popular summer sailings to Alaska.
  • China’s CATL, the world’s largest electric-vehicle battery maker, is spending nearly $5 billion to build or upgrade domestic factories to meet growing demand.

Our Operations

  • 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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