COVID-19 Bulletin: March 19

Good Afternoon,

News on how COVID-19 is impacting the global plastics industry follows:

Supply

• Oil prices (WTI) improved early today after falling to $20.37 a barrel yesterday, the lowest since early 2002 following the 9/11 attacks on the World Trade Center.
• Oil storage facilities are quickly filling in the face of reduced demand and the Russia/Saudi price war, portending a further drop in prices in coming weeks.
• PE producers continue to report strong demand and stable prices for Prime PE.
• All PE plants continue to be operational and running full out.
• Suppliers suspect the demand surge is temporary amid concerns about fallout based on a long-term global downturn.
• PP producers are expressing concern about automotive plant shutdowns.
• PP demand remains strong; however, pricing is expected to erode based on monomer ties to oil.
• All PP plants continue to be operational and running full out.

Supply Chain

• Port of Houston’s Barbours Cut and Bayport Container terminals are closed until further notice after a worker was infected with COVID-19. Officials hope to reopen by Monday.
• Our Gold Standard Distribution Partners report no disruptions of operations due to COVID-19.
• Port congestion and associated container availability continue to cause delays in international shipments, both imports and exports.

Markets

• Ford, GM, Nissan, Toyota and Honda are closing down U.S. production starting this week and next; traffic is stalled at car dealerships; Ford has suspended its dividend to preserve cash. FCA is reducing shifts.
• Tesla’s Fremont, CA, facility has reduced its workforce.
• VW will close European plants for 2-3 weeks.
• J.D. Powers projects a production drop of as many as three million vehicles this year due to COVID-19.
• Some Healthcare specifiers and molders are overwhelmed with surging demand and maintaining safe operations. There is an intensifying shortage of ventilators in the U.S.
• Demand for single-use bags and PS foam containers has spiked as restaurants convert to takeout-only status.
• Lawmakers in Maine suspended a ban on single-use plastic bags, deeming them safer than reusable bags in the face of COVID-19. Other states are considering similar bag-ban suspensions.
• Retail sales were off 20% last week and 36% on Sunday from the prior week.
• Unemployment claims are soaring in states most impacted by the virus; claims in Pennsylvania yesterday were six times the daily average.
• The Senate passed a relief bill that includes supplemented sick leave for Coronavirus victims working for companies with fewer than 500 employees; employers are required to pay the sick leave and then seek reimbursement from the federal government. Employers with fewer than 50 employees can seek exemption.
• In Ohio, businesses are being asked to take the temperature of all employees daily.
• The State Department suspended visa services in most countries.
• A broad coalition of business organizations were rebuffed after pressing the White House to ease tariffs to provide relief to struggling industries.

International

• The White House planned to close the border with Mexico after the country’s President hesitated to take aggressive steps to contain COVID-19 out of concern for the economy.
• Colombia declared a State of Emergency and social distancing restrictions.

Our Operations

• We are collaborating with Automotive clients and suppliers to adjust for plant closures and weakening demand.
• Our 3D Printing lab remains operational and is printing parts for clients.
• Ed Holland shared an optimistic perspective with Mployees.

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.