Good Afternoon,
As COVID-19 deaths in the U.S. topped 3,000, the pandemic continues to impact the plastics industry:
Supply
- The WTI futures price slid 6.6% to $20.09 yesterday after the White House extended social distancing guidelines until the end of April. Brent crude fell nearly 9% to $22.76.
- Oil prices, down 67% this year, are on pace to register their biggest monthly and quarterly drop in history.
- Permian Basin oil was nearly $10 below benchmark prices due to the oil glut and full storage facilities.
- OPEC’s poorer member nations face potentially calamitous economic challenges in the wake of the collapse of demand and prices.
- Spot PE pricing is dropping as suppliers are experiencing downward pressure in both pricing and demand globally.
- Supply is opening; we are seeing more availability daily.
- Polypropylene pricing is moving down based on a $0.04/lb. drop in the monomer settlement.
- Suppliers are increasingly seeking more account-specific information about plant closures, essential business designations and forecasts; we have deployed our account managers in conducting daily surveys of our account base.
Supply Chain
- COVID-19 found most companies unprepared and underscores the need for improved supply chain mapping.
- We’ve seen no changes in the status of ports:
Markets
- Confirmed cases of COVID-19 have swelled in March from less than 100 to more than 164,000, with nearly half of states reporting more than 1,000 cases.
- The U.S. now has the highest number of confirmed COVID-19 cases:
- Few nations have escaped the reach of COVID-19:
- Lawmakers and regulators in some states are pressing insurance companies to cover business losses, despite policy provisions exempting virus claims.
- China manufacturing expanded in March but remains well below pre-COVID-19 levels. China is now expected to record its first year-over-year GDP contraction since 1976.
- Ford is collaborating with GE to make ventilators and with 3M to manufacture respirators.
- The North American automobile industry, the first to shut down, may re-emerge from COVID-19 transformed:
- Ford announced today that it is indefinitely extending its North American shutdown after a third worker died from COVID-19.
- Most of our automotive clients still operating have announced plant closures following the extensions of shutdowns by OEMs.
- International Automotive Components Group (IAC) announced the permanent layoff of over 600 employees at three U.S. plants and indicated the cuts are not a response to COVID-19.
- Japan’s automotive industry was slowing prior to COVID-19’s emergence.
- COVID-19 has struck a blow to China’s surging electrical vehicle market, with many startups confronting reluctant consumers, expiring government subsidies and cautious investors.
- Manufacturing of electrical and electronic products is ramping up in China; we’ve experienced little discernable increase in domestic resin demand from E&E molders since China’s lockdown.
- Despite massive layoffs, some clients are reporting staffing shortfalls due to employees fearful of contracting COVID-19 and competition with other companies and governmental employers.
International
- Mexico’s Ministry of Health announced the curtailment of non-essential public, private and social activities until April 30.
- Chile extended its national quarantine until April 9.
- Nigeria, one of Africa’s largest plastics markets, imposed a 14-day lockdown in major cities; ports remain operating.
Our Operations
- We have begun paying a stipend to assist Mployees with internet and other costs associated with working from home.
- Our Healthcare team, receiving many requests from molders called into service to make medical products, is organizing a “Molding for Medical” webinar to help clients understand resin selection, regulatory considerations and the approval process. More information to come.
- 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.