LONDON, Feb. 20, 2020 /PRNewswire/ -- Last week, CRU's
China offices in Shanghai and Beijing returned to work following the Chinese
New Year holiday, which was extended due to the outbreak of novel
coronavirus (Covid-19).
This virus has had a heavy human cost, and there has also been
severe disruption to business and trade in China. CRU's analysts, on-the-ground in
China, provide us with three key
takeaways for commodities: first, labour shortages and transport
disruptions have reduced both metals demand and supply; second,
industries face bottlenecks at different parts along their value
chain; third, it will take time for labour to return to work and
for these bottlenecks to clear. As such, we do not see a return to
business as usual until at least March.
Major business disruption to transport
Road transport is a universal problem disrupting the commodity
supply chains in China.
Bottlenecks are forming through supply chains, especially those
that are reliant on trucking. For steel the blockage appears to be
between steel mills and warehouses. For aluminium it is earlier,
between smelter and fabrication plants.
Moving goods in and out of China has also been affected. Although, ports
appear to be operating well, enabling inflow of raw materials some
supply chain disruption has led to concerns about export and thus
global supply chains.
The implications for commodity prices are nuanced
On the demand side, metals demand is lower than the usual
seasonal level. End use demand has fallen given reduced labour
availability and medical equipment to ensure safety at work. For
supply, blockages have built at different parts of the metals value
chain. The implication of these changes for commodities markets
depends on the speed of recovery of demand relative to supply in
China, and China's role in global markets either as a net
exporter or importer of the commodity.
Read the full story:
https://www.crugroup.com/knowledge-and-insights/insights/2020/coronavirus-to-cause-protracted-disruption-to-transport-and-labour/
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About CRU
CRU offers unrivalled business intelligence on the global
metals, mining and fertilizer industries through market analysis,
price assessments, consultancy and events.
Since our foundation by Robert
Perlman in 1969, we have consistently invested in primary
research and robust methodologies, and developed expert teams in
key locations worldwide, including in hard-to-reach markets such as
China.
CRU employs over 280 experts and has more than 11 offices around
the world, in Europe, the
Americas, China, Asia and Australia – our office in Beijing opened in 2004 and Singapore in 2018.
When facing critical business decisions, you can rely on our
first-hand knowledge to give you a complete view of a commodity
market. And you can engage with our experts directly, for the full
picture and a personalised response.
CRU – big enough to deliver a high-quality service, small enough
to care about all of our customers.
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SOURCE CRU