The COVID-19 crisis continues to impact the plastics industry:
Supply
The oil price (WTI) closed last week at $22.53, down 11% on Friday and 29% for the week, the biggest weekly drop in as many years.
Texas regulators began talks with OPEC to seek a truce in the ongoing oil price war, which has driven prices down more than 60% this year. U.S. antitrust laws present a barrier to a formal agreement regarding production levels or pricing.
Current oil prices are well below Russia’s approximately $40/bbl. average fiscal breakeven point and the roughly $80/bbl. Saudi Arabia needs to maintain its economy.
Oil producers are challenged by the industry downturn:
Occidental Petroleum, which made a big bet on the Permian Basin with its recent acquisition of Anadarko, slashed its dividend and is expected to announce board room changes.
Total S.A. announced an austerity program involving expense and capital spending cuts and suspension of stock buybacks.
Many debt-laden shale producers face potential bankruptcy.
Domestic resin suppliers report no production issues; resin production is deemed “essential business” in states with work-at-home restrictions.
Suppliers are beginning to announce that order changes will not be accepted.
Some resin producers are delaying previously announced PE price increases for March.
PP pricing is facing a push-pull dynamic between falling monomer prices and spiking demand for non-wovens, packaging and other markets bolstered by the COVID-19 crisis.
Supply Chain
Our domestic Gold Standard Distribution Centers and trucking partners are operating without interruption and are deemed “essential” in stay-at-home states. We will update clients of any closures daily.
U.S. Customs and Border Protection advised importers that payment of duties, taxes and fees may be deferred under certain circumstances due to the COVID-19 outbreak. Requests will be decided on a case-by-case basis.
U.S. Ports are experiencing modest delays:
Markets
More than a third of the U.S. population is now under state-mandated stay-at-home restrictions.
As more states impose formal social-distancing restrictions, many plastics manufacturers are unsure of their status as “essential” or “non-essential” businesses. Some clients have declared force majeure as a result of mandated shutdowns.
All U.S. automakers have announced production pauses. BMW was the last automaker to make an announcement.
Toy manufacturers such as Hasbro are reporting a surge in sales as more families are locked down in their homes.
There is a growing consensus among economists that a recession is underway; Goldman Sachs projects U.S. output will decline by 3.1% for the year and unemployment will approach 10%, the high from October 2009, the peak in the Great Recession.
St. Louis Federal Reserve President James Bullard warns that GDP could fall 50% and unemployment could reach 30% in the coming months, followed by a rebound once the healthcare crisis is tamed.
In a Willis Towers Watson survey of more than 800 large employers, more than half intend to continue paying hourly workers whose workplaces are closed due to the virus.
Hospitals are enlisting crowdsourcing and 3D Printing to produce parts for medical safety gear; Smile Direct, HP and others with 3D Printing capacity are diverting production to make ventilator valves, breathing filters and face mask clasps.
Supply chain disruptions have been reported for importing 3D filament from Asia and Europe. Amazon is “prioritizing” restocking in its warehouses to medical supplies and essential products, creating tight supply for discretionary goods, including 3D filament.
International
The U.S. and Mexico agreed to close their border to non-essential travel.
The U.S. dollar continued to strengthen, sending values of other assets lower and weakening some foreign currencies to record lows. The Mexican peso fell below 25:1.
Europe is encountering growing logistics challenges due to longer border crossings, labor constraints, container shortages and route reductions due to falling freight demand.
Retailers and factories in China are reopening, two months after COVID-19 shut down the country.
Our Operations
Our entire team is mobilized and operational remotely.
Today we launched an internal database to monitor the production status of clients in order to manage inventories in real time while ensuring we have the right materials in the right places at the right time to meet market needs.
We are requiring firm ship dates on all new orders.
After Illinois announced stay-at-home restrictions, our 3D Printing distribution business and laboratory initiated contingency plans and remain operational.
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.
We and selected third-parties use cookies on our website to give you the most relevant experience by remembering your preferences and repeat visits. By clicking “Accept”, you consent to the use of ALL third-party cookies. For more details about cookies and how we use them, read the full Data Privacy Policy.
This website uses cookies to improve your experience while you navigate through the website. Out of these, the cookies that are categorized as necessary are stored on your browser as they are essential for the working of basic functionalities of the website. We also use third-party cookies that help us analyze and understand how you use this website. These cookies will be stored in your browser only with your consent. You also have the option to opt-out of these cookies. But opting out of some of these cookies may affect your browsing experience. For more details about cookies and how we use them, read the full Data Privacy Policy.
Necessary cookies are absolutely essential for the website to function properly. These cookies ensure basic functionalities and security features of the website, anonymously.
Cookie
Duration
Description
cookielawinfo-checkbox-advertisement
1 year
Set by the GDPR Cookie Consent plugin, this cookie is used to record the user consent for the cookies in the "Advertisement" category .
cookielawinfo-checkbox-analytics
11 months
This cookie is set by GDPR Cookie Consent plugin. The cookie is used to store the user consent for the cookies in the category "Analytics".
cookielawinfo-checkbox-functional
11 months
The cookie is set by GDPR cookie consent to record the user consent for the cookies in the category "Functional".
cookielawinfo-checkbox-necessary
11 months
This cookie is set by GDPR Cookie Consent plugin. The cookies is used to store the user consent for the cookies in the category "Necessary".
cookielawinfo-checkbox-others
11 months
This cookie is set by GDPR Cookie Consent plugin. The cookie is used to store the user consent for the cookies in the category "Other.
cookielawinfo-checkbox-performance
11 months
This cookie is set by GDPR Cookie Consent plugin. The cookie is used to store the user consent for the cookies in the category "Performance".
viewed_cookie_policy
11 months
The cookie is set by the GDPR Cookie Consent plugin and is used to store whether or not user has consented to the use of cookies. It does not store any personal data.
Functional cookies help to perform certain functionalities like sharing the content of the website on social media platforms, collect feedbacks, and other third-party features.
Cookie
Duration
Description
__cf_bm
30 minutes
This cookie, set by Cloudflare, is used to support Cloudflare Bot Management.
bcookie
1 year
LinkedIn sets this cookie from LinkedIn share buttons and ad tags to recognize browser ID.
bscookie
1 year
LinkedIn sets this cookie to store performed actions on the website.
lang
session
LinkedIn sets this cookie to remember a user's language setting.
lidc
1 day
LinkedIn sets the lidc cookie to facilitate data center selection.
UserMatchHistory
1 month
LinkedIn sets this cookie for LinkedIn Ads ID syncing.
Performance cookies are used to understand and analyze the key performance indexes of the website which helps in delivering a better user experience for the visitors.
Analytical cookies are used to understand how visitors interact with the website. These cookies help provide information on metrics the number of visitors, bounce rate, traffic source, etc.
Cookie
Duration
Description
_ga
2 years
The _ga cookie, installed by Google Analytics, calculates visitor, session and campaign data and also keeps track of site usage for the site's analytics report. The cookie stores information anonymously and assigns a randomly generated number to recognize unique visitors.
_ga_S6SF7JZ2WY
2 years
This cookie is installed by Google Analytics.
_gat_UA-7828007-1
1 minute
A variation of the _gat cookie set by Google Analytics and Google Tag Manager to allow website owners to track visitor behaviour and measure site performance. The pattern element in the name contains the unique identity number of the account or website it relates to.
_gcl_au
3 months
Provided by Google Tag Manager to experiment advertisement efficiency of websites using their services.
_gid
1 day
Installed by Google Analytics, _gid cookie stores information on how visitors use a website, while also creating an analytics report of the website's performance. Some of the data that are collected include the number of visitors, their source, and the pages they visit anonymously.
CONSENT
2 years
YouTube sets this cookie via embedded youtube-videos and registers anonymous statistical data.
vuid
2 years
Vimeo installs this cookie to collect tracking information by setting a unique ID to embed videos to the website.
Advertisement cookies are used to provide visitors with relevant ads and marketing campaigns. These cookies track visitors across websites and collect information to provide customized ads.
Cookie
Duration
Description
_fbp
3 months
This cookie is set by Facebook to display advertisements when either on Facebook or on a digital platform powered by Facebook advertising, after visiting the website.
fr
3 months
Facebook sets this cookie to show relevant advertisements to users by tracking user behaviour across the web, on sites that have Facebook pixel or Facebook social plugin.
IDE
1 year 24 days
Google DoubleClick IDE cookies are used to store information about how the user uses the website to present them with relevant ads and according to the user profile.
personalization_id
2 years
Twitter sets this cookie to integrate and share features for social media and also store information about how the user uses the website, for tracking and targeting.
test_cookie
15 minutes
The test_cookie is set by doubleclick.net and is used to determine if the user's browser supports cookies.
VISITOR_INFO1_LIVE
5 months 27 days
A cookie set by YouTube to measure bandwidth that determines whether the user gets the new or old player interface.
YSC
session
YSC cookie is set by Youtube and is used to track the views of embedded videos on Youtube pages.
yt-remote-connected-devices
never
YouTube sets this cookie to store the video preferences of the user using embedded YouTube video.
yt-remote-device-id
never
YouTube sets this cookie to store the video preferences of the user using embedded YouTube video.
yt.innertube::nextId
never
This cookie, set by YouTube, registers a unique ID to store data on what videos from YouTube the user has seen.
yt.innertube::requests
never
This cookie, set by YouTube, registers a unique ID to store data on what videos from YouTube the user has seen.