COVID-19 Bulletin: March 26

March 26, 2021 • Posted in COVID-19

Hello,

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Supply

  • Oil prices slipped roughly 4% on Thursday on concerns about a third wave of coronavirus lockdowns in Europe and a slowdown in deliveries to China as refineries there undergo maintenance. Futures prices are now in contango, where near-term delivery contracts are priced lower than longer-term contracts on expectations that consumption will drop. 
  • Natural gas prices rose yesterday after the Energy Information Administration reported a drop in domestic inventories, which are now below their five-year average. 
  • Crude futures were higher in mid-day trading today, with the WTI up 4.0% at $60.90/bbl and Brent 3.9% higher at $64.34/bbl. Natural gas was 2.0% higher at $1.96/MMBtu.
  • A burst natural gas pipeline in Venezuela has cut crude production in the country by 30,000 bpd.
  • China overtook the U.S. as the world’s largest oil refiner last year, although the positions are expected to reverse again by the end of 2021. 
  • Canada’s oil industry could lose up to 7,300 additional jobs this year, a result of continued industry consolidation. 
  • The U.S. Department of Energy announced plans yesterday to reduce the cost of solar energy by 60% over the next decade.  
  • Imports of cheap ethane from the U.S. are boosting Europe’s plastics industry and sparking conflict with policymakers and environmentalists. 
  • A new report by risk consultants Verisk Maplecroft predicts a wave of political instability in some oil-dependent nations as the world shifts toward renewable energy.  
  • The oil industry’s top lobbying group is set to push Congress for a bill that would price carbon emissions across the economy.
  • Our most recent list of force majeure and allocation announcements from suppliers is here.

Supply Chain

  • A group of tugboats and a dredger were working yesterday at the Suez Canal to dig out the giant container ship that ran aground Wednesday.
    • The Suez Canal blockage has increased the cost of renting tankers and caused shippers to start plotting alternative routes for supplies of oil and gas. 
    • Retail and manufacturing importers are considering alternate routes around the blockage, including sending goods using pricier airfreight or on ships sailing around Africa, which could stretch out deliveries by two weeks. 
    • The Suez blockage is now affecting 238 vessels, up from 186 on Wednesday, as captured on satellite images.
    • Oil and gas prices could jump in a prolonged blockage of the Suez Canal, which is a passageway for nearly 10% of the world’s oil and liquefied natural gas trade. 
    • Caterpillar, already facing several-week delays from supply chain constraints, expects the Suez Canal blockage to add a week to 10 days to deliveries.  
    • Two of the world’s three biggest shipbuilders announced new orders totaling $3 billion to build 25 container vessels, all of a similar size to the giant ship currently blocking the Suez. 
  • Importers report losing millions of dollars due to delays and congestion at New Zealand’s Port of Auckland. 
  • The global semiconductor shortages forced Ford to idle its F-150 truck plant in Michigan through Monday and Chinese electric vehicle startup Nio to shut down for five days.  
  • Berkshire Hathaway Energy Infrastructure proposed investing $8.3 billion to build 10 backup power plants in Texas that would run during electricity emergencies, a month after the state suffered devastating blackouts.
  • 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

International

  • New COVID-19 cases surpassed 100,000 in Brazil yesterday, a record, as the country experiences the highest daily fatality rate in the world. Brazil’s president, a harsh critic of restrictions and lockdowns in the past, is taking a more collaborative approach to contain the virus and accelerate vaccinations.
  • Mexico yesterday became the third country behind the U.S. and Brazil to surpass 200,000 COVID-19 fatalities, a number widely considered understated. 
  • Yesterday, India recorded its highest count of new COVID-19 cases since October, as health officials said they have identified 771 cases of virus variants in the country.
  • France extended lockdowns to three additional regions as Germany considers declaring France a high-risk COVID-19 nation and requiring tests for cross-border entry. 
  • Health officials in Germany warned that virulent variants of COVID-19 could make the intensifying third wave of the virus worse than the first two.
  • The U.K. parliament agreed to extend emergency government powers prompted by the pandemic for another six months and approved plans to gradually ease lockdown restrictions over the next three months. 
  • Denmark will extend its suspension of AstraZeneca’s COVID-19 vaccine through April 15 as the country continues to investigate reports of blood clots and low blood platelets linked to the product.
  • Wealthier countries, wracked by COVID-19 resurgences, are hoarding vaccines and pinching supplies for COVAX, the international collaboration intended to distribute vaccines to poor nations.
  • European Union leaders have tightened their rules regarding the export of COVID-19 vaccines to other nations, saying it will consider whether the recipient country has any restrictions on vaccines or raw materials and if it is in a better epidemiological situation. 
  • Japan’s parliament approved a record budget of nearly $1 trillion, with more emergency spending expected, as the country emerges from a state of emergency imposed in January due to the pandemic. 
  • Mercedes-Benz is joining the luxury electric vehicle battle with the debut of a new flagship electric sedan with a 700-kilometer range on April 15. The company plans to introduce eight additional models on three continents next year.
  • Ford will phase out production of its iconic Mondeo sedan in Europe in early 2022 and prioritize efforts toward electric vehicles and SUVs.
  • A team of international researchers has developed a new bioplastic packaging film from seaweed that is biodegradable, edible, and can help keep foods fresh, while a separate team from Yale University has developed a bioplastic made with wood pulp.  

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.
  • M. Holland is proud to be named among the Plastics News Best Places to Work again this year. We also were recently named among the Best Places to Work by Crain’s Chicago Business.
  • 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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