COVID-19 Bulletin: July 6

July 6, 2021 • Posted in COVID-19

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Supply

  • OPEC producers called off talks started last week after failing to reach agreement on extending pandemic-induced output cuts for the months ahead. The indecision caused oil prices to spike nearly 1.5% Monday amid forecasts of tight supply in the busy summer season, with Brent rising above $77/bbl for the first time since 2018.
  • Energy prices were lower late this morning, with the WTI down 1.9% to $73.75/bbl, Brent down 2.9% to $74.91/bbl and natural gas off 2.1% to $3.62/MMBtu.
  • The United Arab Emirates emerged as a primary figure in the stalled OPEC output talks, roughly seven months after the nation unsuccessfully tried to break ties with the oil-producing cartel in December.
  • OPEC boosted crude production by 855,000 bpd to 26.5 million bpd in June, its largest output hike in a year.
  • Mexico’s administration appointed state-owned oil major Pemex to operate the country’s largest privately discovered oil field, the latest in a string of nationalizing moves in the country’s energy sector. The decision was criticized by U.S.-based Talos, which made the discovery in 2017 and has since invested heavily in the reservoir.
  • Royal Dutch Shell opened a 10-megawatt electrolysis plant at a German refinery, part of a plan to increase production of “green” hydrogen fuel.
  • Venezuela exported 631,900 bpd of crude in June, up 6.5% from May and 66% from a year ago.
  • Chevron is moving ahead on a $4 billion project with Gorgon LNG aimed at improving gas recovery from offshore wells in Western Australia and keeping a nearby plant filled with LNG for the next 40 years.
  • Our most recent list of force majeure and allocation announcements from suppliers is here.  

Supply Chain

  • Tropical Storm Elsa made landfall in Cuba Monday, with high winds and torrential rain expected to hit Florida as early as Wednesday. Other weather events predicted for this week include continued record drought conditions in the U.S. West and excessive heat in parts of the interior Northwest U.S. and western Canada.
  • At least 118 people died in the U.S. Pacific Northwest during the most intense portion of last week’s heat wave.
  • Long-term drought has overtaken more than two-thirds of Mexico, damaging crops and tightening water supplies.
  • A massive ransomware attack against IT services firm Kaseya paralyzed networks for more than 200 of its clients Friday.
  • Through the first 25 weeks of 2021, U.S. rail carloads are up 8.9% compared to the same time last year, with intermodal volumes up 17.7%.
  • The average global price to ship a 40-foot container has risen to $8,399, more than four times the level of a year ago and is up 53.5% from the first week of May. Prices to ship from China to European and U.S. West Coast ports are nearing $12,000/container.
  • Cargo rates from Asia are expected to push past current record-highs as demand for China-made goods grows ahead of the holiday shopping season.
  • Forecasts for Germany’s vehicle production this year fell by 10 percentage points, a result of continuous supply-chain disruptions, while June vehicle sales in China fell 16.3% from a year earlier.
  • Daimler AG and Jaguar Land Rover are the latest carmakers to lower sales expectations due to the global chip shortage.
  • European truck makers Daimler, Volvo and Traton are partnering on a $600 billion project to build a high-performance public charging network for electric freight trucks in the bloc.
  • A Boeing 737 cargo plane was forced to make an emergency water landing in Honolulu Friday over reports of engine trouble.
  • Amazon’s carbon footprint grew 19% last year as the company expanded rapidly to meet a surge of e-commerce demand.
  • Zebra Technologies will acquire the remaining 95% of Fetch Robotics as it plans to further invest in warehouse automation technology.
  • Our logistics team reports that bulk trucking firms are often declining to book long-haul, out of network loads due to extreme capacity constraints.
  • Logistics conditions remain strained, with trucking demand exceeding availability and continued congestion at ports primarily due to increased volume of ships and containers. Clients are advised to provide expanded lead times on orders to help ensure delivery dates.

Markets

  • The U.S. reported 5,528 new COVID-19 cases and 41 deaths Monday.
  • The highly transmissible Delta strain of the virus now accounts for a quarter of all new infections in the U.S.
  • The U.S. was ranked No. 1 on a Bloomberg chart for “Reopening Progress,” a result of the nation’s fast and expansive vaccine rollout with the world’s most effective shots.
  • Twenty states, two U.S. territories and Washington, D.C. have crossed the threshold of inoculating 70% of residents with at least one COVID-19 vaccine dose.
  • Vermont currently has the greatest share of people fully vaccinated against COVID-19: 
The US States Closest to Full Vaccination
  • Nearly half of U.S. states reported rising COVID-19 infections last week.
  • Over 99% of new COVID-19 deaths in the U.S. are from unvaccinated people, officials say.
  • States with vaccination rates below the national average have COVID-19 infection rates that are three times higher than average, prompting concern they could become breeding grounds for new variants.
  • COVID-19 cases in Arkansas jumped by 700 last Thursday, the state’s largest single-day increase since February.
  • COVID-19 cases are increasing in Florida, with the state reporting a jump in its week-over-week positivity rate from 3.8% to 5.2%.
  • The COVID-19 Delta variant accounts for the largest share of new infections in California at 35.6%, a sevenfold increase from May.
  • The Delta variant of COVID-19 is eight times less sensitive to vaccine antibodies, new research suggests.
  • Johnson & Johnson says its single-shot COVID-19 vaccine is effective enough against the Delta variant that people will not need a booster shot within a year, while Pfizer reported its vaccine is 70% effective against the strain.
  • COVID-19 was the seventh leading cause of U.S. deaths in June, a stark turnaround from its leading position in January.
  • The White House will donate tens of millions more COVID-19 vaccine doses to other countries throughout the summer, adding to 80 million doses already allocated.
  • An index of U.S. manufacturing activity decreased slightly from May to June but remained at historically high levels, indicating robust growth.
  • Teen workers accounted for 36% of new hires in June, more than three times normal, as employers struggle against a shortage of adult candidates.
  • Ride-sharing services Uber and Lyft are investing millions into new perks to lure drivers back to the platforms, hoping to improve driver scarcity and lower fares for riders.
  • The U.S. trade deficit expanded 3.1% from April to May on a rise in purchases of imported products across a broad range of industries. 
  • Individual investors poured roughly $28 billion into stocks and exchange-traded funds in June, the highest monthly amount since 2014.
  • Retail investing has helped propel U.S. stocks to a historic post-crash run…
Stocks Emerge From Covid Crash With Historic 12-Month Run
  • U.S. mortgage companies anticipate an influx of delinquent loans from the 14% of homeowners who joined pandemic-induced forbearance programs that are set to expire in September.
  • U.S. vehicle sales dropped for the second consecutive month in June to below pre-pandemic levels, with imported-vehicle sales down 13.1% and domestic-vehicle sales down 8.7% month over month.
  • General Motors will partner with Controlled Thermal Resources for low-cost lithium sourced from California for its electric vehicle production.

International

  • India is expected to see a third wave of COVID-19 infections starting in August.
  • The U.K. will stick with a plan to end most pandemic restrictions July 19 despite growing concern over the COVID-19 Delta variant’s spread. Infections in the nation rose 53% the past week, with 27,334 cases reported Monday.
  • Japan will extend a pandemic state of emergency in Tokyo and several nearby prefectures until after the Olympics, as new daily COVID-19 cases remain in the thousands.
  • COVID-19 deaths in Indonesia neared 500 per day the past week, triple the levels of early June as the nation reported 29,745 new infections and 558 virus deaths Monday, a record.
  • COVID-19 cases in Spain rose 85% last weekend compared to the previous weekend, largely due to the Delta variant’s spread among young people. Some regions of the country are reimposing nightlife restrictions.
  • The COVID-19 Delta variant represented nearly 23% of cases in Italy as of June 22, up from just 1% in mid-May.
  • South Korea reported more than 700 COVID-19 infections for three consecutive days, levels approaching six-month highs.
  • German health officials are pushing for people to mix COVID-19 vaccine doses to help ward off Delta variant infections.
  • The hospital system in Sydney, Australia, is in “red alert” after an unvaccinated nurse worked during the infectious stage of COVID-19. Officials are likely to extend a strict lockdown in the region following dozens of new infections over the weekend. 
  • Russia reported 679 new COVID-19 deaths last Friday, a record.
  • Business activity in the eurozone expanded at the fastest rate in 15 years in June, as accelerated COVID-19 vaccine campaigns prompted more countries to end pandemic restrictions. 
  • Taiwan, a major exporter of technology goods, saw exports rise for the 12th consecutive month in June, up more than 30% from the same time last year.
  • Growth in China’s services sector fell to a 14-month low in June, reflecting the possibility that pent-up COVID-19 demand has already peaked in the world’s second-largest economy.
  • Services activity in Japan fell for the 17th consecutive month in June, dipping into contraction territory as the nation’s COVID-19 emergency continues to hurt demand.
  • Global stocks remained near record highs Monday, reflecting positive data over U.S. jobs and European economic activity.
  • Russia’s president signed new legislation requiring businesses to report greenhouse gas emissions, with a goal of cutting the nation’s 2030 emissions to 70% of 1990 levels.
  • Airbus delivered more than 70 planes in June, up 38% compared to the same time last year as air travel rebounds.

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.
  • 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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