Manufacturing in China running well below capacity

Although February 10th was the official “return to work” day in China after a week-long extension of the Lunar New Year break, passenger volumes on Monday with Guangzhou Railways were well down on the norm

Carmaker Toyota is keeping its 12 China plants closed for at least another week. It appeared that manpower shortage meant that few factories would be operating anywhere near full capacity, for this week at least. The knock-on effect for supply chains and shipping exports could be significant.

BIMCO chief shipping market analyst Peter Sand said at the weekend that an extended shutdown of China would temporarily cripple the shipping markets and hit freight rates hard.

Alphatanker has cut its base case forecast of global oil demand this year by 0.2m bpd to an average of 101.1m bpd. This compares with global demand being trimmed by 0.1m bpd because of the SARS outbreak in 2004.

As reported in IMN yesterday, LNG buyer CNOOC has invoked force majeure, telling some suppliers that it would not take delivery of cargoes because of constraints caused by nCoV.

Chinese copper smelter Guangxi Nanguo has also declared force majeure and is refusing to take delivery of raw materials.