COVID-19 Bulletin: January 21

January 21, 2021 • Posted in COVID-19, News

Good Afternoon,

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Supply

  • Natural gas prices fell Wednesday on warmer weather forecasts for the next two weeks.
  • Crude prices dipped on concerns about COVID-19 outbreaks in Asia and the West and a rise in stockpiles. In mid-day trading today, the WTI was down 0.3% at $53.16/bbl, and Brent was up 0.1% at $56.11/bbl. Natural gas was down 2.5% at $2.47/MMBtu.
  • The pandemic claimed 107 U.S. oil and gas companies that filed for bankruptcy in 2020, fewer than the 142 bankruptcies during the industry collapse in 2016 but involving significantly higher indebtedness.
  • The International Energy Agency again cut forecasts for global oil demand in 2021, predicting a 600,000 bpd decrease on the effects of lockdowns and production cuts.
  • Many supertanker owners are losing money transporting oil from the Arab Gulf to China, a result of more oil tankers on the market and production cuts in Saudi Arabia, the world’s largest exporter.
  • Norway announced 61 offshore exploration licenses to 30 companies in the nation’s latest licensing round.
  • The White House revoked a permit needed to complete the Keystone XL oil pipeline from Alberta to Nebraska, effectively canceling the project
  • America will rejoin the Paris climate accord within 30 days after an executive order issued by the White House on Wednesday. Another White House directive provided a temporary moratorium on oil and gas leasing in Alaska’s Arctic National Wildlife Refuge. 
The State of the Paris Agreement
  • Saudi Aramco may be understating its carbon emissions in official reporting by as much as 50%
  • Renew Oceans, an initiative founded in 2019 and sponsored by some of the world’s leading petrochemicals companies, has ceased operations, failing to achieve its goal of stemming the flow of plastic waste from the Ganges River into the Indian Ocean.
  • INEOS Styrolution announced plans to build a demonstration polymerization plant in Belgium to convert plastic waste into ABS.

Supply Chain

  • An unseasonal Santa Ana wind event stirred hurricane-strength winds and sparked numerous wildfires in Southern and Central California.
  • COVID-19 outbreaks at the nation’s busiest ports are aggravating congestion, prompting officials at the national, state and local levels to urge prioritization of dock workers for vaccines.
  • More than 1 in 3 worldwide containers are being “rolled over,” or not loaded onto the vessels they were meant to sail on, due to a variety of factors in congested supply chains.
  • Employment in long-distance general freight transport remained relatively flat near the end of 2020, one factor of many causing elevated spot prices.
  • Logistics giant Maersk announced plans to purchase its first carbon-neutral ship as soon as 2023.
  • 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

International

  • The U.K. recorded more than 1,800 one-day COVID-19 fatalities, a record. New credit card purchases in the country are down 35% from pre-pandemic levels, underscoring the economic impact of the coronavirus.
  • Sweden, experiencing the highest COVID-19 death rate in the Nordic region, extended face mask mandates and a ban on serving alcohol.
  • COVID-19 deaths in Germany have doubled in the past month, surpassing 50,000. Germany’s chancellor announced that all citizens must wear medical-grade masks where masks are mandated instead of cloth coverings.
  • Portugal reported 14,647 new COVID-19 cases Wednesday, a record.
  • Northern Chinese provinces are ramping up efforts to contain COVID-19 outbreaks by building temporary quarantine facilities, imposing new lockdowns and rolling out citywide testing. Officials also ordered strict travel restrictions for Lunar New Year travel, along with barricades around southern Beijing after six new infections were found there. 
  • Pfizer/BioNTech’s COVID-19 vaccine is effective against the highly infectious U.K. strain of COVID-19, new research shows, while other research suggests vaccinated people and formerly infected patients could be susceptible to reinfection by the virulent new virus strain from South Africa.
  • The benefits of AstraZeneca/Oxford’s COVID-19 vaccine — no dilution requirements or post-shot patient monitoring for severe allergic reactions — has allowed the U.K. to vaccinate more than half of its nursing home population
  • Argentina approved Russia’s Sputnik V COVID-19 vaccine, recommending its use on people over age 60.
  • Investments in rubber glove production in Thailand will exceed $800 million over the next several years thanks to demand triggered by the pandemic.
  • Canada’s annual inflation rate slowed in December from the previous month to 0.7%, a result of increased lockdowns and lower costs of airplane tickets, clothing and footwear. The Central Bank, expecting a robust recovery when lockdowns end, said it will maintain low rates until at least 2023.
  • China, the only nation that experienced GDP growth in 2020, saw growth in domestic consumption lag increases in the industrial and export sectors, suggesting its economic recovery was highly unbalanced.
  • International tennis players, some from global COVID-19 hotspots, flew in droves to Australia last week ahead of the Australian Open, a stark contrast to the thousands of Australian nationals who are stuck overseas due to the nation’s restrictive measures for inbound passengers.

Our Operations

  • Our Market Managers report that tight supplies of many products continue to affect most plastics markets:
    • Automotive: Automakers are being challenged to satisfy rising demand by tight resin supplies, rising materials costs and a global shortage of computer chips, which is causing spot production disruptions. Electric vehicle interest and investment is robust from both legacy automotive producers and startups.
    • Color & Compounding: Activity continues to improve, but overcapacity persists depending on markets served. Consolidation trends also continue, particularly in the masterbatch industry. Demand is growing for sustainable products.
    • Electrical & Electronics: Demand for home electronics and computers remains strong, with shortages of computer chips impacting value chains. We continue to see some reshoring of production from Asia as manufacturers seek greater supply chain security.
    • Healthcare: The resurgence of COVID-19 infections and hospitalizations are driving a corresponding spike in demand for hospital disposables, testing supplies and personal protective equipment, with some reshoring of production from Asia for such products. 
    • International: Supply chains and ports are congested, with an imbalance in containers creating havoc and driving up costs, particularly from Asia to destinations in the West. China will celebrate the Lunar New Year in February, which should briefly slow manufacturing and exports.
    • Packaging: Demand for packaging and single-use applications remains steady. The recent spike in COVID-19 infections has stimulated demand for staples and food products. We are seeing increasing inquiries about sustainability solutions.
    • Sustainable Products: We have expanded our Sustainability team and line card in response to growing demand for sustainable products and solutions from most end markets.
    • Wire & Cable: We continue to see strong demand from the telecommunications, renewable energy and home construction markets. Demand from the oil and gas and infrastructure segments remains soft.
    • 3D Printing: We continue to invest in our 3D Printing business unit, adding staff, relocating to a larger facility and expanding our product line in response to growing industrial interest in the technology. 
  • Resource Center: M. Holland offers a host of resources to clients, prospects and suppliers. To arrange a videoconference or meeting, contact:

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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