Coronavirus predicted to wipe 6m teu of Chinese box volumes in Q1
Every segment of the shipping industry is now choking on reduced volumes of cargoes sparked by the coronavirus in China, which has now infected around 25,000 people around the world.
On the container front, analysts at Alphaliner are warning that the coronavirus will reduce container cargo volumes at Chinese ports – including Hong Kong – by over 6m teu in the first quarter of 2020. This volume contraction is expected to reduce global container throughput growth by at least 0.7% for the full year.
“The full impact of the Chinese coronavirus outbreak on container volumes will not be fully measurable until ports announce their throughput numbers for the first quarter, but data collected on weekly container vessel calls at key Chinese ports already shows a reduction of over 20% since 20 January,” Alphaliner warned in its latest weekly report.
Breakwave Advisors’ latest fortnightly report on dry bulk states that the majority of industrial business in China has “basically shut down”.
“China industrial activity is severely impacted and operating at reduced rates to say the least. Construction activity, steel production, logistical chains and imports are suffering, and this is evident in freight rates that are hovering at record lows across asset classes and geographies,” the report stated.
Researchers at Singapore’s Eastport Maritime noted today that due to the delayed return to work, a decline in efficiency at ports has been seen in all Chinese ports.
Meanwhile, OPEC and its allies are debating more aggressive oil output cuts than previously considered after reviewing new data Tuesday that showed the coronavirus’s deepening impact on global oil demand.
China’s largest energy giants are also looking at slashing the amount of LNG they had committed to import in the first quarter.
Global car shipments are also likely to be massively effected too with a number of international auto manufacturers shuttering production in China and Hyundai Motor halting work at one of its production lines in Ulsan, Korea as it was unable to source necessary parts from China. Other automotive plants in Asia are understood to be preparing to scale back production as parts run thin.
While the Lunar New Year holidays have officially been extended through to the end of this week, Splash contacts across China are reporting that many garment and machinery related companies have made contingency plans to down tools for the whole of February.
