Good Afternoon,
As COVID-19 spreads, Washington is poised to pass a $2 trillion economic package to mitigate the economic fallout. Following is other news relevant to the plastics industry:
Supply
- Most suppliers continue to operate without interruption.
- Occidental Petroleum, which announced expense and capital reductions early this week, said it will cut salaries by as much as 30% in response to the drop in oil prices and demand.
- Suppliers, seeking greater clarity for production planning, are requesting forecasts with longer time horizons and more detailed market information.
- Overseas suppliers recommend that clients plan for increased lead times on shipments due to potential port delays and inland shipping disruptions.
Supply Chain
- All our Gold Standard logistics and transportation partners are operating without interruption.
- Yesterday’s announced three-week shutdown in India led to a rash of order cancellations among resin traders; shipments stranded by the cancellations could exacerbate the continuing tight availability of containers.
- U.S. ports are experiencing modest delays:
Markets
- Seventeen states have now imposed stay-at-home restrictions; four have ordered non-essential business closures but stopped short of issuing stay-at-home edicts.
- States barring non-essential businesses from operating comprise over 40% of GDP.
- James Bullard, president of the St. Louis Federal Reserve, projects that GDP will bottom in the second quarter, experiencing up to a 50% drop, with the third quarter as a “transitional” period and a strong rebound in the fourth quarter and first quarter of 2021.
- To bridge the economic time-out imposed to help fight COVID-19, the U.S. Federal Reserve implemented unprecedented measures to encourage liquidity in financial markets, including public and private debt guarantees.
- U.S. lawmakers reached agreement on an approximately $2 trillion rescue package to mitigate the economic disruption caused by COVID-19, including financial aid for businesses and workers.
- Most of our Wire & Cable clients have been deemed essential businesses and remain in operation.
- State unemployment offices are overwhelmed with new claims. While the federal government has requested that states stop reporting weekly filings, private economists estimate that 1.5 million jobless claims were filed last week, more than twice the historic high in weekly filings.
- School closures have affected nearly 1.4 billion students globally:
International
- The central bank in Norway, Western Europe’s leading oil producer, intervened in currency markets for the first time since 1999 to prop up the krone, which has fallen precipitously due to the collapse of oil prices.
- The U.S. State Department has repatriated more than 9,000 Americans from foreign countries.
- Spain extended its state of emergency to April 11 after surpassing China with the second highest COVID-19 death rate behind Italy.
Our Operations
- We have not yet experienced a material drop in transaction or order volumes. We are closely monitoring demand changes.
- Except for Automotive, about 90% of our regular clients remain operational.
- Ed Holland shared an encouraging perspective on the COVID-19 crisis.
- M. Holland is open for business, deemed essential and will continue to operate at full capacity. We have issued the following status statement:
In accordance with the guidance provided by the U.S. Department of Homeland Security Cybersecurity & Infrastructure Security Agency (CISA), M. Holland Company is considered a member of a critical infrastructure industry and will therefore remain operative. As such, with any necessary accommodations made to ensure the health and safety of our staff and business partners, we will continue to fully perform our normal business operations.
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.